EXERCISE 10-20A

Exercise 10-20A Effective interest amortization of a bond discount On January 1, Year 1, Parker Company issued bonds with a face value of $80,000, a stated rate of inter. est of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 9 percent at the time the bonds were issued. The bonds sold for \$76.888. Parker used the effective interest rate method to amortize the bond discount. Required a. Prepare an amortization table as shown next: b. What item(s) in the table would appear on the Year 4 balance sheet? c. What item(s) in the table would appear on the Year 4 income statement? d. What item(s) in the table would appear on the Year 4 statement of cash flows? Exercise 10-20A Effective interest amortization of a bond discount On January 1, Year 1, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 9 percent at the time the bonds were issued. The bonds sold for $76,888. Parker used the effective interest rate method to amortize the bond discount. Required a. Prepare an amortization table as shown next: b. What item(s) in the table would appear on the Year 4 balance sheet? c. What item(s) in the table would appear on the Year 4 income statement? d. What item(s) in the table would appear on the Year 4 statement of cash flows? Exercise 10-20A Effective interest amortization of a bond discount On January 1. Year I. Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8 pereent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 9 percent at the time the bonds were issued. The bonds sold for \$76.888. Parker used the effective interest rate method to amortize the bond discount. Required a. Prepare an amortization table as shown next: b. What item(s) in the table would appear on the Year 4 balance sheet? c. What item(s) in the table would appear on the Year 4 income statement? d. What item(s) in the table would appear on the Year 4 statement of cash flows? Exercise TU-20A Effective interest amortization of a bond discoumt On January 1, Year 1, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 9 percent at the time the bonds were issued. The bonds sold for $76,888. Parker used the effective interest rate method to amortize the bond discount. Required a. Prepare an amortization table as shown next: b. What item(s) in the table would appear on the Year 4 balance sheet? c. What item(s) in the table would appear on the Year 4 income statement? d. What item(s) in the table would appear on the Year 4 statement of cash flows? Brercise 20A