Amortization table required to develop entries over life of bond Carrying Value

Amortization table required to develop entries over

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Amortization table required to develop entries over life of bondCarrying Value xMarket rate =Interest Expense -Interest payment =AmortizationNew CVF.Journal entries:Interest expense (per table)xxxPremium on BP (if applicable)xxxDiscount on BP (if applicable)xxxCashxxxG.Long Term Notes payments: payment = Principal / PVA factor1.Recording: debit cash, credit note payableH.Amortization table same as above except no column for interest payment. All amortization is reduction of principal. Discount only involved if the stated interestrate was not realistic (such as 0%)I.Skip notes exchanged for noncash assetsJ.Early extinguishment of debt1.Be sure you have closed out all related balances2.Difference between carrying value and cash paid is gain or lossK.Convertible bonds: when bonds are converted, bonds (and related discount or premium) are reduced for their carrying value, stock issuance is recorded at that value, REGARDLESS of market price of sharesL.Recording Bonds with detachable warrants1.Debit cash for proceeds2.Credit bonds payable at face value3.Credit warrants at market value4.Debit discount on BP or credit premium on BP for difference5.
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