Use the effective interest rate method.

Assume the annual stated rate is 8% and effective rate is 11%. Semi- Interest Discount Discount on Bonds annual Cash Carrying Period Expense on Bonds Payable Payable Value Balance 7,571 136,429 1 5,760 7,504 1,744 5,827 138,173 2 3 2,046 4 2,047 144000 Assume the stated rate is 8% and effective rate is 4%. Semi- annual Cash Carrying Period Value 10,967 154,967 1 5,760 3,099 2,661 8,306 152,306 2 Check My Work