On January 1 of this year, Ikuta Company issued a bond with a face value of $300,000 and a coupon rate of 5 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 6 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) fror the tables provided. Round your answers to whole dollars.) Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Cash Interest Interest Book Value of Bond Date Amortization Expense Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 an Year 2? December 31 Year 1 Year 2 Interest expense Bonds pavable

On January 1 of this year, Ikuta Company issued a bond with a face value of $300,000 and a coupon rate of 5 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 6 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) fror the tables provided. Round your answers to whole dollars.) Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Cash Interest Interest Book Value of Bond Date Amortization Expense Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 an Year 2? December 31 Year 1 Year 2 Interest expense Bonds pavable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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