Chekhov Company sold $200,000 of bonds on December 31, 2018. A portion of the am

Question

Chekhov Company sold $200,000 of bonds on December 31, 2018. A portion of the amortization table appears below Discount Discount Bond Payable Carrying Value (Credit) Cash Interest on Bonds on Bonds Period Payment Expense Payable Payable Balance (Credit) (Debit) (credit) (Debit) At issue 6/30/2019 $12,000 $12,800 12/31/2019 12,000 12,800 6/30/2020 $8,000 7,200 6,400 $192,000 $192,800 193,600 $800 800 Required 1. Determine the stated interest rate on these bonds 2. Calculate the interest expense and the discount amortization for the interest period ending June 30, 2020 Interest expense Discount amortization

Explanation / Answer

1 Stated interest rate=12000/200000*2= 12% 2 Interest expense 12800 Discount amortization 800 3 Bond liability = 193600+800 = $194400

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