Presented below is a partial amortization schedule for Discount Pizza. (2) (1) Period Cash Paid for (3) Interest Interest Expense (4) Increase in Carrying Value (5) Carrying Value Issue Date $55,736 1 2 $1,800 1,800 $1,951 1,956 $151 55,887 156 56,043 Required: 1. & 2. Record the bond issue and first interest payment assuming the face amount of bonds payable is $60,000. 3. Interest expense increases each period because the carrying value of the debt issued at a discount increases over time.
Presented below is a partial amortization schedule for Discount Pizza. (2) (1) Period Cash Paid for (3) Interest Interest Expense (4) Increase in Carrying Value (5) Carrying Value Issue Date $55,736 1 2 $1,800 1,800 $1,951 1,956 $151 55,887 156 56,043 Required: 1. & 2. Record the bond issue and first interest payment assuming the face amount of bonds payable is $60,000. 3. Interest expense increases each period because the carrying value of the debt issued at a discount increases over time.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Presented below is a partial amortization schedule for Discount Pizza.
(2)
(1)
Period
Cash Paid for
(3)
Interest
Interest
Expense
(4)
Increase in
Carrying Value
(5)
Carrying
Value
Issue Date
$55,736
1
2
$1,800
1,800
$1,951
1,956
$151
55,887
156
56,043
Required:
1. & 2. Record the bond issue and first interest payment assuming the face amount of bonds payable is $60,000.
3. Interest expense increases each period because the carrying value of the debt issued at a discount increases over time.
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