Homework Answers
Solution:
| Bond Amortization Table (Straight Line) | |||||
| Period | Cash Payment | Interest Expense | Premium on bond payable (192000/8) | Premium on bond payable Balance | Carrying value |
| At issue | $1,92,000 | $17,92,000 | |||
| 12/31/20 | $1,44,000 | $1,20,000 | $24,000 | $1,68,000 | $17,68,000 |
| 12/31/21 | $1,44,000 | $1,20,000 | $24,000 | $1,44,000 | $17,44,000 |
| 12/31/22 | $1,44,000 | $1,20,000 | $24,000 | $1,20,000 | $17,20,000 |
| 12/31/23 | $1,44,000 | $1,20,000 | $24,000 | $96,000 | $16,96,000 |
| 12/31/24 | $1,44,000 | $1,20,000 | $24,000 | $72,000 | $16,72,000 |
| 12/31/25 | $1,44,000 | $1,20,000 | $24,000 | $48,000 | $16,48,000 |
| 12/31/26 | $1,44,000 | $1,20,000 | $24,000 | $24,000 | $16,24,000 |
| 12/31/27 | $1,44,000 | $1,20,000 | $24,000 | $0 | $16,00,000 |
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