Exercise 14-6 Blue Company sells 10% bonds having a maturity value of S 1,300,00
ID: 2581183 • Letter: E
Question
Exercise 14-6 Blue Company sells 10% bonds having a maturity value of S 1,300,000 or $1,205 280 The bonds are dated January: L 2017, and mature January 2022 Interest is Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to O decimal places, e.g. 38,548.) bie annually on January Schedule of Discount Amortization Straight-Line Method Cash Paid Interest Expense Discount Amortized Carrying Amount of Bonds Year Jan. 1, 2017 Jan. 1, 2018 Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2021 Jan. 1, 2022Explanation / Answer
Year
Cash Paid
Interest Expense
Discount Amortized
Carrying amount of bonds
Jan 1 2017
1206280
Jan 1 2018
130000
[1300000*10%]
148744
[(130000+18744)]
18744
[(1300000-1206280)/5]
1225024
[1206280+18744]
Jan 1 2019
130000
148744
18744
1243768
[1225024+18744]
Jan 1 2020
130000
148744
18744
1262512
[1243768+18744]
Jan 1 2021
130000
148744
18744
1281256
[1262512+18744]
Jan 1 2022
130000
148744
18744
1300000
[1281256+18744]
Year
Cash Paid
Interest Expense
Discount Amortized
Carrying amount of bonds
Jan 1 2017
1206280
Jan 1 2018
130000
[1300000*10%]
148744
[(130000+18744)]
18744
[(1300000-1206280)/5]
1225024
[1206280+18744]
Jan 1 2019
130000
148744
18744
1243768
[1225024+18744]
Jan 1 2020
130000
148744
18744
1262512
[1243768+18744]
Jan 1 2021
130000
148744
18744
1281256
[1262512+18744]
Jan 1 2022
130000
148744
18744
1300000
[1281256+18744]
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