Cagney Company sold $200,000 of bonds on December 31, 2008. A portion of the amortization table appears below.

Required:
1. Determine the stated interest rate on these bonds.
2. Calculate the interest expense and the discount amortization for the interest period ending June 30, 2010.
3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30,2010.

Transcribed Image Text:

Discount Discount Cash Interest on Bonds on Bonds Payment Expense Payable Payable Carrying Period At issue 6/30/09 12/31/09 6/30/10 (Credit) (Debit Crit) Balance Value $6,000 $194,000 5,400 194,600 $11,000 $11,600 $600 11,000 11,600 600 4,800 195,200