Ch. 10-Hamework Prob x Chegg Study | Guided Sc Not secure |ezto.mheducation.com/
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Question
Ch. 10-Hamework Prob x Chegg Study | Guided Sc Not secure |ezto.mheducation.com/hm.tpx ::: Apps ? Bookmarks D B Blackboard M McGraw-Hill Connect b Pearson OM D MACRO D Maple Just 11 Really Helpfu @GMU Account GMU Parking os Mason Mail Other bookmarks Question 6 (of 12) Save &&EX; value: 10.00 points E10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Discount and Determining Reported Amounts L010-4 On January 1 of this year, Ikuta Company issued a bond with a face value of $170,000 and a coupon rate of 5 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 6 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of S1, FVA of $1 and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required 1. Complete a bond amortization schedule for all three years of the bond's life Discount Amortization Book Value Cash Interest Interest Expense Date se Bond Jan. 01, Year 1 Dec. 31. Year 1 Dec. 31, Year 2 Dec. 31, Year 3 9,924 S 8,500 s S 8,500 S 8,500 1,424 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? December 31 Interest expense Bond liability Year 1 Year 2 O Type here to search 9.39 AM 4/24/2018Explanation / Answer
Answer
Date
Cash Interest
Interest expense
Discount amortisation
Book Value of Bond
01-Jan
$ 1,65,456
31-Dec
$ 8,500
$ 9,927
$ 1,427
$ 1,66,833
31-Dec
$ 8,500
$ 10,013
$ 1,513
$ 1,68,396
31-Dec
$ 8,500
$ 10,104
$ 1,604
$ 1,70,000
Dec-31
Year 1
Year 2
Interest expense
$ 9,927
$ 10,013
Bond Liability
$ 1,66,883
$ 1,68,396
Date
Cash Interest
Interest expense
Discount amortisation
Book Value of Bond
01-Jan
$ 1,65,456
31-Dec
$ 8,500
$ 9,927
$ 1,427
$ 1,66,833
31-Dec
$ 8,500
$ 10,013
$ 1,513
$ 1,68,396
31-Dec
$ 8,500
$ 10,104
$ 1,604
$ 1,70,000