Question

Required information (The following information applies to the questions displayed below.) Part 1 of 2 On January 1, 2021, Splash City issues $400,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. points Assuming the market interest rate on the issue date is 9%, the bonds will issue at $367,422. Required: 1. Complete the first three rows of an amortization table. (Round your intermediate and final answers to the nearest whole dollar.) Answer is not complete. Date Cash Paid Interest Expense Change in Carrying Value Carrying Value 1/1/21 6/30/21 12/31/21 $ 367,422 350,888 X $ $ 16,000 16,000 $ 16,534 16,534 534 534
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Answer 1

Cash interest = 400000*8%*6/12 16000.0 Interest Expenses =367422*9%*6/12 16534 367956*9%*6/12 16558 Amortization Sechedule Interest Discount Date Cash Paid | Expense amortized Carrying Value Jan-21 06/30/21 12/31/21 16000 16000 16000 16534 16558 16583 534 558 583 367422 367956 368514 369097

Date Issue Entry 1. Record the Bond Issue General Journal Debit Credit 01-01-2021 Cash 367422 Discount on Bonds Payable 32578 Bonds Payable 400000 Record the issue of the Bond with Discount Journal entris for interest Payment Record the interest payment and amotization on June 30 1st First Year Date General Journal Debit Credit 06/30/21 Interest Expenses 16534 Discount on Bonds Payable 534 Cash 16000 Record the interest Expense and amortization of Discount Date 12/31/21 3. Record theinterest and amotization on Dec 31, First Year General Journal Debit Credit Interest Expenses 16558 Discount on Bonds Payable 558 Cash 16000 Record the interest Expense and amortization of Discount