Exercise 17-5

On January 1, 2017, Phantom Company acquires $200,000of Spiderman Products, Inc.,9% bonds at a price of $185,589. Interest is received on January 1 of each year, and the bonds mature on January 1, 2020. The investment will provide Phantom Company a12% yield. The bonds are classified as held-to-maturity.

Make a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method.(Round answers to 0 decimal places, e.g. 2,500.)

Schedule of Interest Revenue and Bond Discount Amortization

Straight-line Method

Bond Purchased to Yield

Date

Cash

Received

Interest

Revenue

Bond Discount

Amortization

Carrying Amount

of Bonds

1/1/17$

$

$

$

1/1/18

1/1/19

1/1/20

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method.(Round answers to 0 decimal places, e.g. 2,500.)

Schedule of Interest Revenue and Bond Discount Amortization

Effective-Interest Method

Bond Purchased to Yield

Date

Cash

Received

Interest

Revenue

Bond Discount

Amortization

Carrying Amount

of Bonds

1/1/17$

$

$

$

1/1/18

1/1/19

1/1/20

SHOW LIST OF ACCOUNTS

LINK TO TEXT

(c)Prepare the journal entry for the interest revenue and discount amortization under the straight-line method at December 31, 2018.(d)Prepare the journal entry for the interest revenue and discount amortization under the effective-interest method at December 31, 2018.

(Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.

Account Titles and Explanation

Debit

Credit

(c)

(d)