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On January 1, when the market interest rate was 9 percent, Corp. completed a $200,000, 8% bond issue for $187,165. The bonds pay interest each
On January 1, when the market interest rate was 9 percent, Corp. completed a $200,000, 8% bond issue for $187,165. The bonds pay interest each December 31 and mature in 10 years. Using the effective-interest method, amortize the bond discount. a. Prepare a bond discount amortization schedule for these bonds. Round calculations to the nearest dollar. The templates below may help organize your answer and is optional. IDID THIS FOR YOU - go on the the journal entries below. Market 9% Coupon 8% Income Statement Interest Ending Bond Liability Balances Period Ended Interest Expense Cash Paid Disc/Prem. Amortized Bonds Payable Carrying Value Start Yr 1 End Yr 2 End Yr 3 End Yr 4 End Yr 5 End Yr 6 End Yr 7 End Yr 8 End Yr 9 End Yr 10 End $ $ $ $ $ $ 16,844.85 16,920.89 17,003.77 17,094.11 17,192.57 17.299.91 17,416.90 17,544.42 17.683.42 17,834.92 16,000.00 16,000.00 16,000.00 16.000.00 16,000.00 16,000.00 16,000.00 16,000.00 16.000.00 16,000.00 844.85 920.89 1,003.77 1,094.11 1,192.57 1,299.91 1,416.90 1,544.42 1,683.42 1,834.92 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 Dis/Prem on Bonds Payable 12,835.00 11,990.15 11,069.26 10,065.50 8,971.39 7,778.82 6.478.91 5,062.01 3,517.59 1,834.18 -0.75 187,165.00 188,009.85 188,930.74 189,934.50 191,028.61 192,221.18 193,521.09 194,937.99 196,482.41 198,165.82 200,000.75 $ $ $ $ b. Prepare the journal entry to record the bond issuance. c. Prepare the journal entry to record the first interest payment on December 31 Year 1. d. Assume Company decided to eliminate $100,000 (1/2 of the issue) at the end of year 3 (after making the required interest payment) by purchasing the bonds on the open market for $95.250. Record the entry to reflect this purchase
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