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29 Sep 2019
On July 1, 2010, Atwater Corporation issued $1,681,700 face value,9%, 10-year bonds at $1,920,720. This price resulted in aneffective-interest rate of 7% on the bonds. Atwater uses theeffective-interest method to amortize bond premium or discount. Thebonds pay semiannual interest July 1 and January 1.
Instructions
(Round all computations to 0 decimal places, e.g. 125. Use roundedamounts for future computations.)
Prepare an amortization table through December 31, 2011 (3 interestperiods) for this bond issue.
Semiannual Interest Periods/ Interest to Be Paid/ Interest Expense/Premium Amortization/ Unamortized Premium/ Bond CarryingValue
Issue Date
1
2
3
On July 1, 2010, Atwater Corporation issued $1,681,700 face value,9%, 10-year bonds at $1,920,720. This price resulted in aneffective-interest rate of 7% on the bonds. Atwater uses theeffective-interest method to amortize bond premium or discount. Thebonds pay semiannual interest July 1 and January 1.
Instructions
(Round all computations to 0 decimal places, e.g. 125. Use roundedamounts for future computations.)
Prepare an amortization table through December 31, 2011 (3 interestperiods) for this bond issue.
Semiannual Interest Periods/ Interest to Be Paid/ Interest Expense/Premium Amortization/ Unamortized Premium/ Bond CarryingValue
Issue Date
1
2
3
Instructions
(Round all computations to 0 decimal places, e.g. 125. Use roundedamounts for future computations.)
Prepare an amortization table through December 31, 2011 (3 interestperiods) for this bond issue.
Semiannual Interest Periods/ Interest to Be Paid/ Interest Expense/Premium Amortization/ Unamortized Premium/ Bond CarryingValue
Issue Date
1
2
3
Jarrod RobelLv2
29 Sep 2019
Related questions
A company issued 10%, 5-year bonds with a par value of$2,000,000 on January 1, 2014. Interest is to be paid semiannuallyeach June 30 and December 31. The bonds were sold at $2,162,218based on an annual market rate of 8%. The company uses theeffective interest method of amortization.
(1) Complete the following amortization table for the semiannualpayment periods using the format shown below (round to the nearestdollar).
Semiannual Interest Period | Interest Paid | Interest Expense | Premium Amortization | Unamortized Premium | Carrying Value |
01/01/2014 | N/A | N/A | N/A | $162,218 | |
06/30/2014 | |||||
12/31/2014 | |||||
06/30/2015 |
| Manilow Company issued $497,000, 7%, 20-year bonds on January 1, 2014, at 102. Interest is payable semiannually on July 1 and January 1. Manilow uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
