On January 1, 2016, Parker Company issued bonds with a face value of $53,000, a stated rate of interest of 11 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 13 percent at the time the bonds were issued. The bonds sold for $49,272. Parker used the effective interest rate method to amortize the bond discount. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

A. Prepare an amortization table

Date	Cash Payment	Interest Expense	Discount Amortizartion	Carrying Value
January 1, 2016				49.272
December 31, 2016	5,830	6,405	575	49,847
December 31, 2017
December 31, 2018
December 31, 2019
December 31, 2020
Totals

B. What is the carrying value that would appear on the 2019 balance sheet?

C. What is the interest expense that would appear on the 2019 income statement?

D. What is the amount of cash outflow for interest that would appear in the operating activities section of the 2019 statement of cash flows?

Carr Corporation issued $79,000 of 5 percent, 12-year bonds on January 1, 2016, for a price that reflected a 6 percent market rate of interest. Interest is payable annually on December 31.

To determine the appropriate discount factor(s) using tables, click here to view Tables I, II, III, or IV in the appendix. Alternatively, if you calculate the discount factor(s) using a formula, round to six (6) decimal places before using the factor in the problem.

http://lectures.mhhe.com/connect/0073527122/Tables/table1.JPG

http://lectures.mhhe.com/connect/0073527122/Tables/table2.JPG

http://lectures.mhhe.com/connect/0073527122/Tables/table3.JPG

http://lectures.mhhe.com/connect/0073527122/Tables/table4.JPG

A. What was the selling price of the bonds? (Round your intermediate calculations and final answer to the nearest dollar amount.) B. Prepare the journal entry to record issuing the bonds. (Round your intermediate calculations and final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) C. Prepare the journal entry for the first interest payment on December 31, 2016, using the effective interest rate method. (Round your intermediate calculations and final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)