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On January 1, 2011, a company sells a 3-year bond with a face value of $200000 and a stated interest rate of 8%. Because the

On January 1, 2011, a company sells a 3-year bond with a face value of $200000 and a stated interest rate of 8%. Because the market interest rate is lower, the company receives $204,000 for the bond. Fill in the table below assuming the company uses the straight-line method of amortization. 190000 for the bond and used the straight-line method of amortization.

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Now Fill the table below assuming the company received only 190000 for the bond and used the straight-line method of amortization. Again a 3 year bond with a face value of $200000 and a stated interest rate of 8%

Period Ended D10111 (A) Cash Puid (B) Amortived Premium (C)-(A-B) Interest Expense (D) Bonds Premium on Payable Bonds Payable (F) (D+E) Carrying Value 1231 11 1231 12 123113 Period Ended 01 0111 (A) Cash Paid (B) Amortized Discount KC)=(A+B) Interest Espense (D) (E) (F)= (-E) Bonds Discount on Carrying Payable Bonds Payable Value 12 3111 1231 12 123113

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