Question
Swifty Company sells 8% bonds having a maturity value of $2,650,000 for $2,356,174. The bonds are dated January 1, 2017, and mature January 1, 2022.
Swifty Company sells 8% bonds having a maturity value of $2,650,000 for $2,356,174. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1. a. Determine the effective-interest rate. The effective-interest rate =
b. Set up a schedule of interest expense and discount amortization under the effective-interest method.
| Year | Cash Paid | Interest Expense | Discount Amortized | Carrying Amount of Bonds |
| Jan. 1, 2017 | ||||
| Jan. 1, 2018 | ||||
| Jan. 1, 2019 | ||||
| Jan. 1, 2020 | ||||
| Jan. 1, 2021 | ||||
| Jan. 1, 2022 |
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Loose Leaf For Financial Accounting Fundamentals
Authors: John Wild, Ken Shaw, Barbara Chiappetta
6th Edition
1260151980, 978-1260151985
