Question

Required information The following information applies to the questions displayed below) On January 1, 2021, White Water issues $430,000 of 5% bonds, due in 15 years, with interest payable annually on December 31 each year. Assuming the market interest rate on the issue date is 6%, the bonds will issue at $388,239 Required: 1. Complete the first three rows of an amortization schedule. (Round your final answers to the nearest whole dollar) Date Cash Paid Interest Expense Increase in carrying Value Carrying Value 01/01/2021 12/31/2021 12/31/2022 < Prev News of 13 !!! Next >

Answer 1

Requirement 1

Date	Cash Paid	Interest expense	Increase in carrying value	Carrying value
01/01/2021				$      388,239
12/31/2021	$        21,500	$        23,294	$ 1,794	$      390,033
12/31/2022	$        21,500	$        23,402	$ 1,902	$      391,935

Requirement 2

Date	Account Title and Explanation	Debit	Credit
Jan 01 2021	Cash	$ 388,239
	Discount on bonds payable	$ 41,761
	Bonds payable		$ 430,000
	(To record Issuance of bonds )
Dec 31, 2021	Bond interest expense	$ 23,294
	Discount on bonds payable		$ 1,794
	Interest payable		$ 21,500
	(Interest on bond paid and Discount amortized)

Dec 31, 2022	Bond interest expense	$ 23,402
	Discount on bonds payable		$ 1,902
	Interest payable		$ 21,500
	(Interest on bond paid and Discount amortized)