Culver Co. sells $424,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 10%. On October 1, 2021, Culver buys back $131,440 worth of bonds for $138,440 (includes accrued interest). Give entries through December 1, 2022. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)
Culver Co. sells $424,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 10%. On October 1, 2021, Culver buys back $131,440 worth of bonds for $138,440 (includes accrued interest). Give entries through December 1, 2022.
Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)
Schedule of Bond Discount Amortization
Effective-Interest Method
Bonds Sold to Yield
Date Cash Paid Interest Expense Premium Amortized Carrying Amount of Bonds
6/1/20 $ $ $
12/1/20
6/1/21
12/1/21
6/1/22
12/1/22
6/1/23
12/1/23
6/1/24
* Difference due to rounding
Prepare all of the relevant
Date Account Titles and Explanation Debit Credit
6/1/20
12/1/20
12/31/20
6/1/21
10/1/21
(To record interest expense and premium amortization)
10/1/21
(To record buy back of bonds)
12/1/21
12/31/21
6/1/22
12/1/22
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