Solar Energy Inc. issued a $900,000, 5%, five-year bond on October 1, 2017. Interest is paid annually each October 1. Solar’s year-end is December 31.

Required 

Using the amortization schedule provided below, record the entry to retire the bonds on October 1, 2020, for cash of:

a. $881,000 

b. $883,500 

c. $886,900

Transcribed Image Text:

Period Ending Oct. 1/17 Oct. 1/18 Oct. 1/19 Oct. 1/20 Oct. 1/21 Oct. 1/22 Cash Interest Paid $ 45,000 45,000 45,000 45,000 45,000 $225,000 Period Interest Expense $ 51,725 52,129 52,557 53,010 53,490 $262,911 Discount Amort. $ 6,725 7,129 7,557 8,010 8,490 $37,911 Unamortized Discount $37,911 31,186 24,057 16,500 8,490 -0- Carrying Value $862,089 868,814 875,943 883,500 891,510 900,000