On December 31, 2020, Whitfield Corp. issued $ 400,000 of 10% bonds, due on December 31, 2025. Interest is to be paid semi-annually on June 30 and December 31. The bonds were sold at a market value of $432,444 to yield 8% effective annual interest. Whitfield has a calendar year end. Required: 1. Complete the following amortization schedule for the dates indicated. Round all answers to the nearest dollar. Use the effective-interest method. Interest expense Carrying amount of bonds Cash interest Premium paid Amortization Dec. 31,2020 $432,444 June 30, 2021 Dec. 31, 2021 Prepare the journal entry for Whitfield at December 31, 2021, to record the payment of 6 months’ interest (from June 30 to December 31) and related expense. Debit Credit Assume instead that Whitfield is using the straight line method to amortize the bond premium. What would be the carrying amount of the bonds at December 31, 2021? i
On December 31, 2020, Whitfield Corp. issued $ 400,000 of 10% bonds, due on December 31, 2025. Interest is to be paid semi-annually on June 30 and December 31. The bonds were sold at a market value of $432,444 to yield 8% effective annual interest. Whitfield has a calendar year end. Required: 1. Complete the following amortization schedule for the dates indicated. Round all answers to the nearest dollar. Use the effective-interest method. Interest expense Carrying amount of bonds Cash interest Premium paid Amortization Dec. 31,2020 $432,444 June 30, 2021 Dec. 31, 2021 Prepare the journal entry for Whitfield at December 31, 2021, to record the payment of 6 months’ interest (from June 30 to December 31) and related expense. Debit Credit Assume instead that Whitfield is using the straight line method to amortize the bond premium. What would be the carrying amount of the bonds at December 31, 2021? i
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On December 31, 2020, Whitfield Corp. issued $ 400,000 of 10% bonds, due on December 31,
2025. Interest is to be paid semi-annually on June 30 and December 31. The bonds were sold at
a market value of $432,444 to yield 8% effective annual interest. Whitfield has a calendar year
end.
Required:
1. Complete the following amortization schedule for the dates indicated. Round all answers
to the nearest dollar. Use the effective-interest method.
Carrying amount
of bonds
Cash interest
Interest expense
Premium
paid
Amortization
Dec. 31,2020
$432,444
June 30, 2021
Dec. 31, 2021
Prepare the journal entry for Whitfield at December 31, 2021, to record the payment of
6 months' interest (from June 30 to December 31) and related expense.
Debit
Credit
Assume instead that Whitfield is using the straight line method to amortize the bond
premium. What would be the carrying amount of the bonds at December 31, 2021?
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