Question
Exercise 14-7 Wildhorse Company sells 10% bonds having a maturity value of $2,550,000 for $2,366,166. The bonds are dated January 1, 2017, and mature January
Exercise 14-7 Wildhorse Company sells 10% bonds having a maturity value of $2,550,000 for $2,366,166. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1. Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.) The effective-interest rate % Set up a schedule of interest expense and discount amortization under the effective-interest method. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Schedule of Discount Amortization Effective-Interest Method Year Cash Paid Interest Expense Discount Amortized Carrying Amount of Bonds Jan. 1, 2017 $ $ $ $ Jan. 1, 2018 Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2021 Jan. 1, 2022
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