On January 1, 2018, Reese Incorporated issued bonds with a face value of $290,000, a stated rate of interest of 8 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 7 percent at the time the bonds were issued. The bonds sold for $301,890. Reese used the effective interest rate method to amortize bond premium.

Required

1. Prepare an amortization table.
2. What item(s) in the table would appear on the 2020 balance sheet?
3. What item(s) in the table would appear on the 2020 income statement?
4. What item(s) and amount in the table would appear on the 2020 statement of cash flows (Direct Method) and under what section the bond liability appear?
5. Req A
6. Req B to D

7. Prepare an amortization table.

   Amortization Schedule
   	Cash Payment	Interest Expense	Premium Amortization	Carrying Value
   January 1, 2018				301,890
   December 31, 2018	23,200	21,132	2,068	299,822
   December 31, 2019
   December 31, 2020
   December 31, 2021
   December 31, 2022
   Totals	116,000	104,110	11,890

8. b. What item(s) in the table would appear on the 2020 balance sheet? c. What item(s) in the table would appear on the 2020 income statement? d. What item(s) and amount in the table would appear on the 2020 statement of cash flows (Direct Method) and under what section the bond liability appear?

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   b.	Carrying value Bond Liabilities
   c.
   d.