The following information applies to the questions displayed

[The following information applies to the questions displayed below. On January 1, 2018, white water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year Assuming the market interest rate on the issue date is 8%, the bonds will issue at $559,229. value: 1.25 points Required: 1. Complete the first three rows of an amortization table. Date Cash Interest Increase in Carrying Expense Carrying Value Value Date Cash Paid 6/30/18S 300,000 12/31/18 300,000

Solution

Req 1 Amort Chart Date Cash paid Interest Increase in Carrying Expense Carrying Amt Amount 01.01.18 559229 30.06.18 21000 22369 1369 560598 31.12.18 21000 22424 1424 562022 Journal entries: Date Accounts title and explanation Debit $ Credit $ 01.01.18 Cash account Dr. 559229 Discount on Bonds payable Account Dr. 40771     Bonds payable 600000 30.06.18 Interest expense Account Dr. 22369       Cash account 21000       Discount on Bonds payable Account 1369 31.12.18 Interest expense Account Dr. 22424       Cash account 21000       Discount on Bonds payable Account 1424