Question

Required information [The following information applies to the questions displayed below.] Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2018, at a price of $95,952. The annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. 1. Prepare an amortization table for these bonds. Use the straight-line method of interest amortization. (Round your answers to the nearest dollar amount.)

Answer 1

Amortization table-Straight-Line method
Discount on Bond =$100,000 - $95,952 =$4,048
Date	Interest Payment	Interest expenses	Discount amorrtization	Bond carrying amount
01-Jan-18				95,952
30-Jun-18	3,500	4,006	506	96,458
31-Dec-18	3,500	4,006	506	96,964
30-Jun-19	3,500	4,006	506	97,470
31-Dec-19	3,500	4,006	506	97,976
30-Jun-20	3,500	4,006	506	98,482
31-Dec-20	3,500	4,006	506	98,988
30-Jun-21	3,500	4,006	506	99,494
31-Dec-21	3,500	4,006	506	1,00,000