Question

Required information Problem 9-6A Prepare a bond amortization schedule and record transactions for the bond issuer (LO9-5) [The following information applies to the questions displayed below.) On January 1, 2021, Universe of Fun issues $790,000, 7% bonds that mature in 15 years. The market interest rate for bonds of similar risk and maturity is 8%, and the bonds issue for $721,696. Interest is paid semiannually on June 30 and December 31. Problem 9-6A Part 1 Required: 1. Complete the first three rows of an amortization schedule. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)

Answer 1

1
	Cash paid	Interest expense	Increase in Carrying value	Carrying value
01/01/21				721696
06/30/21	27650	28868	1218	722914
12/31/21	27650	28917	1267	724181
2
		Debit	Credit
Jan 1	Cash	721696
	Discount on Bonds payable	68304
	Bonds payable		790000
June 30	Interest expense	28868		=721696*8%/2
	Discount on Bonds payable		1218
	Cash		27650	=790000*7%/2
Dec 31	Interest expense	28917		=722914*8%/2
	Discount on Bonds payable		1267
	Cash		27650	=790000*7%/2