Bonds Issued at a Discount (Effective Interest)

Crafty Corporation received $471,068 of cash upon issuance of 500, $1,000 par value bonds. Each bond has a stated rate of 4% and will mature on December 31, 2030, 7 years after the issuance of the bonds. Interest is paid annually on December 31. The market rate of interest is 5%.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answer in the question below.

Open spreadsheet

Required:

Prepare the amortization table using the effective interest rate method.

Note: Round interest expense to a dollar and round final year interest expense amount to complete the amortization.