Three years bonds are issued at face value of $100,000 on Jan. 1, 2017, with a stated interest ratesr of 8%. Interest paid annually on Dec. 31.

Instruction:

1- Calculate the premium/Discount of the bonds, if the market interest rate was 8%.

1-

Face Value

2- Prepare the Amortization schedule for premium/Discount if any.

N. Per

3- Prepare journal entries for 2017.

Rate:

State Rate

Market Rate

Prepare journal entries for 2017:

Interest Payment

3-

Date

Account

Debit

Credit

PV

1/1/2017

Discount / Premium

2-

Payments

Interest Payment

Interest Expense*

**Amortization

***Carring Value

Date

Account

Debit

Credit

12/31/2017