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Exercise 10-7 Straight Line: Amortization table.

Help Sav Required information Exercise 10-7 Straight-Line: Amortization table and bond interest expense LO P2 (The following
Exercise 10-7 Part 2 2. Prepare journal entries to record the first two interest payments. (Round your answers to the nearest
Exercise 10-7 Part 3 3. Prepare the journal entry for maturity of the bonds on December 31, 2022 (assume semiannual interest
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Answer #1

First we need to find the discount amount that is 110000-105895=4105

this 4105 is to be amortized in 4 years which is equal to 8 payments.So 4105/8=513.125 or 513. This 513 is to be paid semi annually. The journal entry becomes

Cash 105895

Discount on bonds payable 4105

To bonds payable 110000

So as per your question,

(1) Unamortized discount Carrying value

Jan 2019 4105 105895

June 2019 3592 106400

Dec 2019 3079 106913

June 2020 2566 107426

Dec 2020 2053 107939

June 2021 1540 108452

Dec 2021 1027 108965

June 2022 514 109478

Dec 2022 0 110000

(2) The journal entries for the first year in two payments becomes

June 2019 Interest expenses 4363

To discount payable 513

To cash 3850

Dec 2019 Interest expenses 4363   

To discount on bonds payable 513

To cash 3850

(3) Upon maturity after semi annual interest rates are paid

Bonds payable 110000

To cash 110000   

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Answer #2

You need to add 513 to 15895 and beyond not 505.  The rest seems correct. 

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