Titania Co. sells $400,000 of 12% bonds on June 1, 2017. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2021. The bonds yield 10%. On October 1, 2018, Titania buys back $120,000 worth of bonds for $126,000 (includes accrued interest). Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end.

Schedule of Bond Discount Amortization Effective-Interest Metho Bonds Sold to Yield Cash Paid Interest Expense Discount Amortized Carrying Amount of Bonds Date 12/1/18 12/1/19 6/1/20 12/1/20 6/1/21 Debit Credit Date Account Titles and Explanation 12/31/ 17 10/1/18 10/1/18 (To record interest expense and premium amortization) 10/1/18 (To record buy back of bonds) 12/1/18 12/31/18 12/1/19