Question

Cornerstone Exercise 9-31 (Algorithmic) Bonds Issued at a Discount (Effective Interest) Sicily Corporation issued $1,450,000 in 10% bonds (payable on December 31, 2029) on January 1, 2020, for $1,290,500. Interest is paid on June 30 and December 31. The market rate of interest is 12%. Required: Prepare the amortization table through December 31, 2021, using the effective interest rate method. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0". If required, round your answers to the nearest whole dollar.

Sicily Corporation Amortization Table

Period	Cash Payment (Credit)	Interest Expense (Debit)	Discount on Bonds Payable (Credit)	Discount on Bonds Payable Balance	Carrying Value
At issue	$	$	$	$	$
6/30/20
12/31/20
6/30/21
12/31/21

Answer 1

Period	Cash Payment (Credit)	Interest Expense (Debit)	Discount on Bonds Payable (Credit)	Discount on Bonds Payable Balance	Carrying Value
At issue				159500	1290500
6/30/2020	72500	77430	4930	154570	1295430
12/31/2020	72500	77726	5226	149344	1300656
6/30/2021	72500	78039	5539	143805	1306195
12/31/2021	72500	78372	5872	137933	1312067