Question
On June 1, 2024, Wildhorse Bottle Company sold $3,900,000 in long-term bonds for $3,420,712. The bonds will mature in 10 years and have a stated
On June 1, 2024, Wildhorse Bottle Company sold $3,900,000 in long-term bonds for $3,420,712. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method.
(a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to 0 decimal places, e.g. 25,000.)
Date Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amount of Bonds
6/1/24
5/31/25
5/31/26
5/31/27
5/31/28
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