Problem 14-5In each of the following independent cases, the company closes its books on December 31. Sarasota Co. sells $532,000 of 8% bonds on March 1, 2017. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2020. The bonds yield 12%. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.) Schedule of Bond Discount AmortizationEffective-Interest MethodBonds Sold to Yield Date CashPaid InterestExpense DiscountAmortizedCarryingAmount ofBonds3/1/17 $$$$9/1/17 3/1/18 9/1/18 3/1/19 9/1/19 3/1/20 9/1/20 Prepare all of the relevant journal entries from the time of sale until the date indicated. (Assume that no reversing entries were made.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) DateAccount Titles and ExplanationDebitCredit3/1/17 3/1/18
Problem 14-5
In each of the following independent cases, the company closes its books on December 31.
Sarasota Co. sells $532,000 of 8% bonds on March 1, 2017. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2020. The bonds yield 12%.
Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)
Schedule of Bond Discount Amortization
Effective-Interest Method
Bonds Sold to Yield
Date
Cash
Paid
Interest
Expense
Discount
Amortized
Carrying
Amount of
Bonds
3/1/17 $
$
$
$
9/1/17
3/1/18
9/1/18
3/1/19
9/1/19
3/1/20
9/1/20
Prepare all of the relevant
Date
Account Titles and Explanation
Debit
Credit
3/1/17
3/1/18
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 5 images
