Question
ABC company issued a bond on Jan. 1st, 2018. ABC Company prepared the following amortization schedule for the bond. Date Cash Paid Interest Expense Decrease
ABC company issued a bond on Jan. 1st, 2018. ABC Company prepared the following amortization schedule for the bond.
| Date | Cash Paid | Interest Expense | Decrease in Carrying Value | Carrying Value |
| 1/1/2018 | $104,212 | |||
| 12/31/2018 | $ 7,000.00 | $6,253 | $747 | $ 103,465.00 |
| 12/31/2019 | 7,000 | 6,208 | 792 | $ 102,673.00 |
| 12/31/2020 | 7,000 | 6,160 | 840 | $ 101,833.00 |
| 12/31/2021 | 7,000 | 6,110 | 890 | $ 100,943.00 |
| 12/31/2022 | 7,000 | 6,057 | 943 | 100,000
|
The bonds have a life of:
a.
4 years.
b.
Cannot be determined from the given information.
c.
3 years.
d.
5 years.
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
