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On June 1, 2014, the Critter Company sold $200,000 in long-term bonds for $175,520. The bonds will mature in 10 years, and have a stated interest...

On June 1, 2014, the Critter Company sold $200,000 in long-term bonds for $175,520. The bonds will mature in 10 years, and have a stated interest rate of 8% and a yield (effective) rate of 10%. The bonds pay interest annually on May 31 of each year. The bond interest is accounted for using the effective interest method. Critter is on a calendar year and does not prepare reversing journal entries. If necessary, round all amounts to the nearest dollar.
Required:
(1) Complete the partial bond amortization table below.
Carrying Value of
Cash Interest Expense Discount Amortized Bonds Payable

Date

6/1/14 XXX XX XXXXXX XXXXXXXXXX $


5/31/15 $ $ $ $


5/31/16 $ $ $ $

(2) Prepare journal entries on the following dates (omit journal entry explanations):
June 1, 2014







December 31, 2014








May 31, 2015

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Accounting-8196869.docx

Answer
Face Value of Bonds =$200,000
Bond Discount
=$200,000-$175,520
=$24,480
1) Bond Amortization table Interest
Interest
Balance Balance
Book
[email protected] Expense Amortization In the
In the Value...

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