Refer to the facts in problem P7-38. Data from P7-38 On January 1, 2013, Bamfield Company purchased

Question:

Refer to the facts in problem P7-38.

Data from P7-38

On January 1, 2013, Bamfield Company purchased bonds with a maturity value of $10,000 for $9,147. These bonds have a 4% per year coupon rate payable semi-annually on June 30 and December 31. The bond matures on December 31, 2017. On January 1, 2013, the market yield for bonds of equivalent risk and maturity was 6% per year.

Required:
Using the straight-line alternative permitted under ASPE, prepare an amortization schedule that shows the amortized cost of this bond at the end of each of five years and the amount of interest income for each of those five years.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...

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