On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Date Credit Cash Debit Interest Expense Credit Bond Discount 6/1/24 $ 5/31/25 $ $ $ 5/31/26 5/31/27 5/31/28 Carrying Amount Bonds Ε
On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Date Credit Cash Debit Interest Expense Credit Bond Discount 6/1/24 $ 5/31/25 $ $ $ 5/31/26 5/31/27 5/31/28 Carrying Amount Bonds Ε
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 1,2024 , Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to 0 decimal places, e.g. 25,000.) Date 61/24 531/25 531/26 531/27 5/31/28 Carrying Amount Debit Interest Expense Credit Bond Discount Bonds $ $ $
Transcribed Image Text:On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and
have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be
accounted for under the effective-interest method.
(a)
Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at
each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.)
Date
Credit Cash
Debit Interest Expense
Credit Bond Discount
Carrying Amount
Bonds
6/1/24
5/31/25
$
5/31/26
5/31/27
5/31/28
$
SU
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