On January 1, 2018, Reese Incorporated issued bonds with a face value of $150,000, 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 $156,150. Reese used the effective interest rate method to amortize bond premium.

1. Pepare 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?

Prepare an amortization table. Amortization Schedule Cash Interest Premium Carrying Payment Expense Amortization Value January 1, 2018 156,150 December 31, 2018 12,000 10,931 1,069 155,081 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 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? Show less b. Carrying value Bond Liabilities