Question

Required information (The following information applies to the questions displayed below.) On January 1, 2021, White Water issues $570,000 of 7% bonds, due in 10 years, with interest payable annually on December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $531,750. Required: 1. Complete the first three rows of an amortization schedule. (Round your final answers to the nearest whole dollar.) Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 01/01/2021 12/31/2021 12/31/2022

Please provide the grid & journals for this. Thanks!

Answer 1

(1)

Date	Cash Paid	Interest Expense	Increase in Carrying Value	Carrying Value
01/01/2021				$531750
12/31/2021	$39900	$42540	$2640	$534390
12/31/2022	$39900	$42751	$2851	$537241

Cash paid = $570000 * 7% = $39900

Interest Exp :-

12/31/2021 = $531750 * 8% = $42540

12/31/2022 = $534390 * 8% = $42751

Increase in Carrying value :-

12/31/2021 = $42540 - $39900 = $2640

12/31/2022 = $42751 - $39900 = $2851

Carrying value :-

12/31/2021 = $531750 + $2640 = $534390

12/31/2022 = $534390 + $2851 = $537241

(2)

Date	Account Titles	Debit	Credit
Jan 1, 2021	Cash	$531750
	Discount on Bonds Payable	$38250
	Bonds Payable		$570000
Dec 31, 2021	Interest Expense	$42540
	Discount on Bonds Payable		$2640
	Cash		$39900
Dec 31, 2022	Interest Expense	$42751
	Discount on Bonds Payable		$2851
	Cash		$39900