Solutions for Bond Amortization Problems for demonstration problems

Accounting: Tools for Business Decision Making

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Bond Amortization Tables For Demonstration Problems Change facts to Semi-annual interest paid June 30 and December 31. Note: for 10-10A parts c and e are irrelevant with revised interest dates.     For 10-11A, Do parts a and b only. Problem 10-10A Term = 10 years Face Value $1,200,000.00 Stated Rate 7% Discount $80,521.00 Effective Rate 8% Issue Price $1,119,479.00 Premium or Premium or  Bond  Semiannual  Cash Interest  Discount Discount Carrying interest date Interest Expense Amortization Acct. Balance Value 1/1/2007 $80,521.00 $1,119,479.00 6/30/2007 $42,000.00 $44,779.16 $2,779.16 $77,741.84 $1,122,258.16 12/31/2007 $42,000.00 $44,890.33 $2,890.33 $74,851.51 $1,125,148.49 6/30/2008 $42,000.00 $45,005.94 $3,005.94 $71,845.57 $1,128,154.43 12/31/2008 $42,000.00 $45,126.18 $3,126.18 $68,719.40 $1,131,280.60 Journal Entries: a) 1/1/2007 Cash $1,119,479.00 Bond Discount $80,521.00          Bonds Payable $1,200,000.00 d)  6/30/2007
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Solutions for Bond Amortization Problems for demonstration problems

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