Chapter $4$: Long$-$term Liabilities

On January $1,2020,$ the market interest rate is $7\%.$ Sharp Sharpy, Inc., issues $$200,000$ of $8\%,20-$year bonds payable at $110.$ The bonds pay interest on June $30$ and December $31.$

Sharp Sharpy measures interest expense by the effective$-$interest method.

Required:

$1.$ Prepare an amortization table for the first four semiannual interest periods.

$2.$ Record the first semiannual interest payment on June $30$ and the second payment on

December $31.$

A B C D E F G H

H B$-$C CxMR BxCR E$-$F C$-/+$G

Date Face V$.$ Beg.BV Dist.$/$Prem Int. Exp Int.Pay Amort. End.BV