Question
On January 1, 2020, Ironman Steel issued $900,000, 8-year bonds for $990,000. The stated rate of interest was 9% and interest is paid annually on
-
On January 1, 2020, Ironman Steel issued $900,000, 8-year bonds for $990,000. The stated rate of interest was 9% and interest is paid annually on December 31.
Required:
Prepare the amortization table for Ironman Steel's bonds. If required, round your answers to nearest whole value. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0".
Ironman Steel Amortization Table Period Cash Payment (Credit) Interest Expense (Debit) Premium on Bonds Payable (Debit) Premium on Bonds Payable Balance Carrying Value At issue $ $ $ $ $ 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 An amortization table helps calculate the proper amortization of bond premium or discount. They are particularly helpful when the effective interest rate method is used; however, this problem amortizes the premium using the straight-line method.
On January 1, 2020, Ironman Steel issued $900,000, 8-year bonds for $990,000. The stated rate of interest was 9% and interest is paid annually on December 31.
Required:
Prepare the amortization table for Ironman Steel's bonds. If required, round your answers to nearest whole value. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0".
| Ironman Steel | |||||
| Amortization Table | |||||
| Period | Cash Payment (Credit) | Interest Expense (Debit) | Premium on Bonds Payable (Debit) | Premium on Bonds Payable Balance | Carrying Value |
| At issue | $ | $ | $ | $ | $ |
| 12/31/20 | |||||
| 12/31/21 | |||||
| 12/31/22 | |||||
| 12/31/23 | |||||
| 12/31/24 | |||||
| 12/31/25 | |||||
| 12/31/26 | |||||
| 12/31/27 | An amortization table helps calculate the proper amortization of bond premium or discount. They are particularly helpful when the effective interest rate method is used; however, this problem amortizes the premium using the straight-line method.
| ||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started