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Bumaby General Stores Inc. is authorized to issue $500,000 of 8.6%, 10-year bonch On December 31, 2020, when the market interest rate is 96%, the

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Bumaby General Stores Inc. is authorized to issue $500,000 of 8.6%, 10-year bonch On December 31, 2020, when the market interest rate is 96%, the company issues $400,000 of the bonds and receives cash of $372,660. Bumaby General amortizes bonds by the effective-interest method. The semi-annual interent dates are January 31 and July 31 Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on December 31, 2020, and the somi-annual interest payments on January 31, 2021, and July 31, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods. (Round the amounts to the nearest dollar) Burnaby General Stores Inc. Amortization Table D E Interest Payment Interest Expense (4.8% Discount Bond Carrying Semi-Annual (4.3% of Face of Preceding Bond Amortization Discount Account Amount Interest Date Value) Carrying Amount) (B-A) Balance (DC) ($400,000-D) Dec 31, 2020 27340 372660 Jan. 31, 2021 17200 17888 688 26652 373348 July 31, 2021 17200 171 July 31, ZULL Requirement 2. Record issuance of the bonds on December 31, 2020, and the semi-annual interest payments on January 3 Start by recording the issuance of the bonds on December 31, 2020 (Record debits first, then credits. Explanations are the nearest dollar.) Date Accounts Debit Credit Dec. 31, 2020 Cash Discount on Bonds Payable 27340 Bonds Payable 400000 Interest Payable Record the first semi-annual interest payment on January 31, 2021. Time Record issuance of the bonds on Uecember 31, 2020, and the semi-annual interest payments on January 31, ZUZT, Debit Credit Record the first semi-annual interest payment on January 31, 2021. Date Accounts Jan. 31, 2021 Interest Expense Interest Payable Discount on Bonds Payable Cash Record the second semi-annual interest payment on July 31, 2017 Accounts Debit Date Credit July 31, 2021 Interest Expense Cash Record the second semi-annual interest payment on July 31, 2021. Debit Credit Date Accounts July 31, 2021 Interest Expense Discount on Bonds Payable Cash

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