Question
Preparing an Amortization Table for Noninterest-Bearing Bonds (Straight Line) On December 31, 2014, Georgetown Distributors borrowed $2,180,000 by issuing 4-year, zero coupon bonds. The face
Preparing an Amortization Table for Noninterest-Bearing Bonds (Straight Line) On December 31, 2014, Georgetown Distributors borrowed $2,180,000 by issuing 4-year, zero coupon bonds. The face value of the bonds is $3,000,000. Georgetown uses the straight-line method to amortize any premium or discount. Required:
Hide Prepare an amortization table for these bonds. If an amount box does not require an entry, leave it blank or enter "0". Georgetown Distributors Amortization Table
Period | Cash Payment (Credit) | Interest Expense (Debit) | Discount on Bonds Payable (Credit) | Discount on Bonds Payable Balance | Carrying Value |
At issue | |||||
12/31/15 | |||||
12/31/16 | |||||
12/31/17 | |||||
12/31/18 |
2. Preparing a Bond Amortization Table (Straight Line) Sonoma Company, issued 5-year, 8.6% bonds with a total face value of $750,000 on December 31, 2013, for $711,450. The bonds pay interest on June 30 and December 31 of each year.
Period | Cash Payment (credit) | Interest Expense (Debit) | Discount on Bonds Payable (Credit) | Discount on Bonds Payable Balance | Carrying Value |
At issue | |||||
6/30/14 | |||||
12/31/14 | |||||
6/30/15 | |||||
12/31/15 | |||||
6/30/16 | |||||
12/31/16 | |||||
6/30/17 | |||||
12/31/17 | |||||
6/30/18 | |||||
12/31/18 |
Prepare the entries to recognize the bond issuance and the interest payments made on June 30, 2014, and December 31, 2014. If an amount box does not require an entry, leave it blank.
2013 Dec. 31 (Record issuance of bonds at discount) 2014 June 30 (Record interest expense) 2014 Dec. 31 (Record interest expense)
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