Exercise 10-23

Pharoah Company issued $375,000, 6%, 15-year bonds on January 1, 2017, for $458,388. This price resulted in an effective-interest rate of 4% on the bonds. Interest is payable annually on January 1. Pharoah uses the effective-interest method to amortize bond premium or discount.

Prepare the schedule using effective-interest method to amortize bond premium or discount of Pharoah Company. (Round answers to 0 decimal places, e.g. 125.) Interest Periods Interest to Be Paid Interest Expense to Be Recorded Premium Amortization Unamortized Premium Bond Carrying Value Issue date HoW LIST OF ACCOUNTS Prepare the journal entry to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2017