Question

On January 1, 2016, a company issues 3-year bonds with a face value of $200,000 and a stated interest rate of 8%. Because the market interest rate is higher than the stated interest rate, the company receives $194,000 for the bond.

Required:

Fill in the table assuming the company uses the straight-line bond amortization.


Period Ended Cash Paid Amortized Discount Interest Expense Bonds Payable Discount on Bonds Payable Carrying Value
01/01/16
12/31/16
12/31/17
12/31/18

Answer

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