On June 30, 2020, the market interest rate is 6%. Burnaby Enterprises issues $525,000 of 7%, 17-year bonds at 116.156. The bonds pay interest on June 30 and December 31. Burnaby amortizes bonds by the effective-interest method. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods. (Round your answers to the nearest whole dollar.) Burnaby Enterprises Amortization Table Semi-Annual Interest Date June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 A Interest Payment (3.5% of Maturity Value) B Interest Expense (3% of Preceding Bond Carrying Amount) C Premium Amortization (A-B) D E Premium Account Bond Carrying Amount Balance (D-C) ($525,000 + D)

On June 30, 2020, the market interest rate is 6%. Burnaby Enterprises issues $525,000 of 7%, 17-year bonds at 116.156. The bonds pay interest on June 30 and December 31. Burnaby amortizes bonds by the effective-interest method. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods. (Round your answers to the nearest whole dollar.) Burnaby Enterprises Amortization Table Semi-Annual Interest Date June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 A Interest Payment (3.5% of Maturity Value) B Interest Expense (3% of Preceding Bond Carrying Amount) C Premium Amortization (A-B) D E Premium Account Bond Carrying Amount Balance (D-C) ($525,000 + D)

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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