Question: Effective Interest Amortization On December 3 1 , Caper, Inc., issued ( $ 7 5 0 , 0 0 0 ) of

Effective Interest Amortization On December

31,

Caper, Inc., issued

\ (\

750, 000 \)

\ (5 \ % \),

nine

-

year bonds for

\ (\

651, 103 \),

yielding an effective interest rate of

\ (7 \ % \) .

Semiannual interest is payable on June

30

and December

31

each year. The firm uses the effective interest method to amortize the discount. Module a

.

Prepare an amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar. Determine the financial statement effect of the following: b

.

Bond issuance on December

31 .

.

Bond interest payment and discount amortization at June

30

of the following year. d

.

Bond interest payment and discount amortization at December

31

of the following year. TIP: If a category is not affected by the bond issuance, enter

0

or leave the field blank. If the transaction affects two accounts in the same category, enter the largest dollar amount in the first row.

Effective Interest Amortization On December 3 1 ,

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