Question

Bramble Corporation issued $540,000,7%, 20-year bonds on January 1, 2022, for $486,983. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Bramble uses the effective-interest method to amortize bond premium or discount. - Your answer is partially correct. Prepare the schedule using effective-interest method to amortize bond premium or discount of Bramble. (Round answers to 0 decimal places, e.g. 5,275.) Interest Periods Interest to Be Paid Interest Expense to Be Recorded Discount Amortization Unamortized Discount Bond Carrying Value Issue date $ 37,800 38,959

Answer 1

Prepare a schedule showing amortization of premium or discount on bonds, in the manner given below A C G к Interest Interest Bond Unamortized Discount amortization Interest carrying value $53,017 $486,983 to be expense to be recorded $0 S38,959 periods 1 discount paid 2 Issue date S0 $1,159 $51,858 $488,142 $50,607 $489,393 $49,256 $490,744 $47,796 $492,204 $46,220 $493,780 $37,800 1 2 $37,800 $39,051 $1,251 4 $37,800 3 $39,151 $1,351 $1,460 $1,576 $1,702 $1,839 $1,986 $2,145 $2,316 $2,501 $37,800 $39,260 $39,376 $39,502 $39,639 $39,786 $39,945 $40,116 S40,301 $40,502 $40,718 4 б $37,800 6 7 $37,800 7 $44,517 S495.483 8 $37,800 S37,800 9 $42,679 $497,321 $40,693 S499,307 S38,548 S501,452 $36,232 S503,768 S33,731 S506,269 S31,029 S508.971 $28,112 S511,888 $24,961 $515,039 $21,557 S518,443 s17,882 S522,118 $13,913 S526,087 $9,626|S530,374 $4,996 S535,004 S0 S540,000 9 10 $37,800 10 11 $37,800 S37,800 12 12 11 13 $37,800 13 S2,702 14 S37,800 14 $2,918 15 S37,800 $37,800 16 $40,951 $3,151 16 $41,203 S41,475 $41,769 $42,087 $42,430 $42,800 $3,403 $3,675 $3,969 $4,287 $4,630 $4,995 15 17 $37,800 S37,800 18 18 17 19 S37,800 19 20 S37,800 20 21 $37,800 22 co LO co

Prepare spreadsheet showing calculation amortization of discount or premium on issue of bonds, in the manner given below C. E G К Interest Bond Interest to be Interest Discount Unamortized carrying expense to paid periods amortization discount be value 2 Issue date 0 з 1 4 2 -540000-486983486983 -K2+G3 K3+G4 =K4+G5 K5+G6 K6+G7 K7+G8 -K8+G9 = K9+G10 =K10+G11 =K11+G12 =K12+G13 -K13+G14 =K14+G15 -K15+G16 =K16+G17 =K17+G18 -K18+G19 -K19+G20 K20+G21 -K21+G22 0 -540000*0.07 -540000*0.07 -540000*0.07 -540000*0.07 =540000*0.07 - 540000*0.07 -540000 0.07 =540000*0.07 -540000*0.07 -540000*0.07 -540000*0.07 -540000*0.07 -540000*0.07 0 -K2*0.08 -K3*0.08 -K4*0.08 =K5*0.08 -K6*0.08 K7*0.08 =K8 *0.08 =K9*0.08 |-Е3-СЗ -E4-C4 -E5-C5 -E6-C6 =E7-C7 -E8-CS -E9-C9 -E10-C10 =K10 0.08||E11-C11 =K11*0.08E12-C12 =K12 0.08E13-C13 =K13 0.08|-E14-C14 =K14*0.08E15-C15 =540000*0.07-K15*0.08|E16-C16 =K16*0.08E17-C17 =540000*0.07-K17*0.08E18-C18 =K18*0.08|E19-C19 =540000*0.07-K19*0.08 -E20-C20 =K20*0.08E21-C21 =12-G3 =13-G4 =14-G5 = 15-G6 =16-G7 = 17-G8 -I8-G9 -19-G10 =110-G11 =I11-G12 =I12-G13 =I13-G14 =I14-G15 =I15-G16 = I16-G17 = I17-G18 =I18-G19 = I19-G20 =120-G21 |=K21*0.08|| =E22-C22-5121-G22 5 3 6 4 7 5 8 6 9 7 10 8 11 9 12 10 13 11 14 12 15 13 16 14 -540000*0.07 17 15 18 16 - 540000*0.07 19 17 20 18 -540000*0.07 =540000*0.07 21 19 22 20 Prepare journal entry to record issuance of bonds in the manner given below: Date 1/1/2022 Cash Account title and explanation Debit $486,983 $53,017 Credit Discount on bonds payable Bonds payable (To record issuance of bonds) $540,000

Prepare a journal entry to record accrued interest and the discount amortized on December 31, 2022, in the manner given below Account title and explanation Date Debit Credit |31/12/2022 Interest expense $38,959 $1,159 S37,800 Discount on bonds payable Interest payable (To record accrul of interest and discount amortized) Prepare a journal entry to record the payment of interest on January 01, 2023, in the manner given below Account title and explanation Debit $37,800 Date Credit 1/1/2013 Interest payable $37,800 Cash To record payment of interest)