Question

On January 1, 2016, a company issues 3-year bonds with a face value of $50,000 and a stated interest rate of 7%. Because the market interest rate is 5%, the company receives $52,723 for the bonds.

Required:

Fill in the table assuming the company uses effective-interest bond amortization.


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

Answer

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