On January 1, 2018, Reese Incorporated issued bonds with a face value of $300,000, 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 $312,300. 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?

Amortization Schedule
	Cash Payment	Interest Expense	Premium Amortization	Carrying Value
January 1, 2018				312,300
December 31, 2018	24,000	21,861	2,139	310,161
December 31, 2019	24,000
December 31, 2020	24000
December 31, 2021	24,000
December 31, 2022	24000
Totals	120,000	107,699	12,300

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.