Debt Issued at a Premium (Straight Line) On January 1, 2020, Ironman Steel issue

Question

Debt Issued at a Premium (Straight Line) On January 1, 2020, Ironman Steel issued $350,000, 8-year bonds for $364,000. The stated rate of interest was 11% and interest is paid annually on December 31 Required Prepare the amortization table for Ironman Steel's bonds. If required, round your answers to nearest whole value. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "O". Tronman Steel Amortization Table Period Cash Payment (Credit) Interest Expense (Debit) Premium on Bonds Payable (Debit) Premum on Bonds Payable Balance Carrying Value At issue 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27

Explanation / Answer

Amortization table :

Period Cash payment Interest expense Premium on bonds payable Premium on bonds payable balance Carrying value At issue 364000 12/31/20 38500 36750 1750 12250 362250 12/31/21 38500 36750 1750 10500 360500 12/31/22 38500 36750 1750 8750 358750 12/31/23 38500 36750 1750 7000 357000 12/31/24 38500 36750 1750 5250 355250 12/31/25 38500 36750 1750 3500 353500 12/31/26 38500 36750 1750 1750 351750 12/31/27 38500 36750 1750 0 350000

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