Question

On January 1, 2017, Hooper Corporation issued 3-year bonds with a $40,000 face amount and a 6% annual coupon rate paid annually on December 31. The bonds were issued at $36,021 when the market rate of interest was 10%. Create the amortization table for the bonds using the effective interest method. Round all amounts to the nearest dollar. Save the table as a PDF file and attach it here. Use the following format:

Date	Cash	Interest Expense	Amortization	Carrying Value
1/1/17
12/31/17
12/31/18
12/31/19

Answer 1

Interest expense Amortization Carrying Value Hooper Corporation Schedule of Bond discount Amortization Calculation Date Cash Interest expense Amortization Carrying Value Cash 6% 10% 1-Jan-17 36,021 31-Dec-17 2,400 3,602 1,202 37,223 40,000 * 6% 31-Dec-18 2,400 3,722 1,322 38,545 40,000 * 6% 31-Dec-19 2,400 3,855 1,455 40,000 40,000 * 6% Face value* 6% 36,021 * 10% 37,223 * 10% 38,545 * 10% Carrying value* 10% 3,602-2,400 3,722-2,400 3,855-2,400 Interest exp less cash 36,021 + 1,202 37,223 + 1,322 38,545 +1,455 Carrying value plus Amort