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On June 30, 2020, the market interest rate is 3%. Armstrong Enterprises issues $545,000 of 4%, 11-year bonds at 120.581. The bonds pay interest on
On June 30, 2020, the market interest rate is 3%. Armstrong Enterprises issues $545,000 of 4%, 11-year bonds at 120.581. The bonds pay interest on June 30 and December 31. Armstrong amortizes bonds by the effective-interest method. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods. (Round your answers to the nearest whole dollar.) Armstrong Enterprises Amortization Table A B D E Interest Interest Expense Payment Premium Premium Account Bond Carrying Semi-Annual (2% of (1.5% of Preceding Bond Carrying Amount) Amortization Balance Amount Interest Date Maturity Value) (A-B) (D-C) ($545,000 + D) June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 June 30, 2022 Requirement 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. (Record debits first, then credits. Explanations are not required. Round your answers to the nearest whole number.) Start by recording the issuance of the bonds on June 30, 2020. Journal Entry Date Accounts Debit Credit June 30 2020 Record the semi-annual interest payment on December 31, 2020. Journal Entry Date Accounts Debit Credit Dec. 31 2020 Record the semi-annual interest payment on December 31, 2020. Journal Entry Date Accounts Debit Credit Dec. 31 2020 Record the semi-annual interest payment on June 30, 2021. Journal Entry Date Accounts Debit Credit June 30 2021
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