On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method.
On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method.
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 3P
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![On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. 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
6/1/24
5/31/25
$
5/31/26
5/31/27
5/31/28
Credit Cash
Debit Interest Expense
Credit Bond Discount
Carrying Amount of Bonds
$
$
$
SUPPOR](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F34091ce1-46ff-4895-99ae-312a9e6931a7%2Fac43e61d-b4e4-428a-afbb-4383dc26f895%2Fai3d5i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. 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
6/1/24
5/31/25
$
5/31/26
5/31/27
5/31/28
Credit Cash
Debit Interest Expense
Credit Bond Discount
Carrying Amount of Bonds
$
$
$
SUPPOR
![On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. 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
531
the first four years. (Round answers to 0 decimal places, e.g. 25,000.) \table[[Date, Credit Cash, Debit Interest Expense,Credit Bond Discount Carrying Amount of Bonds], [6/1/24,,,], [₁₁/25,,,], [¸₁/27,,,], [28 ,,,]]
5
31
5
31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F34091ce1-46ff-4895-99ae-312a9e6931a7%2Fac43e61d-b4e4-428a-afbb-4383dc26f895%2Fybilgki_processed.png&w=3840&q=75)
Transcribed Image Text:On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. 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
531
the first four years. (Round answers to 0 decimal places, e.g. 25,000.) \table[[Date, Credit Cash, Debit Interest Expense,Credit Bond Discount Carrying Amount of Bonds], [6/1/24,,,], [₁₁/25,,,], [¸₁/27,,,], [28 ,,,]]
5
31
5
31
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