Bond amortization schedule using effective-interest method

Assignment Help Financial Management

Reference no: EM131589696

Indigo Co. sells $396,000 of 12% bonds on June 1, 2017. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2021. The bonds yield 8%. On October 1, 2018, Indigo buys back $118,800 worth of bonds for $125,800 (includes accrued interest). 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

6/1/17

12/1/17

6/1/18

12/1/18

6/1/19

12/1/19

6/1/20

12/1/20

6/1/21

Difference due to rounding

Prepare all of the relevant journal entries from the time of sale until the date indicated. Give entries through December 1, 2019. (Assume that no reversing entries were made.)

Reference no: EM131589696

Questions Cloud

Embryotic stem cells to treat diseases : About this discussion: using embryotic stem cells to treat diseases.

Discuss the contemporary issue : Select any contemporary issue that impacts the law enforcement profession or an issue related to the globalization of crime that challenges you.

Forecasted the sales and costs for a new GPS system : Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS? system. What is the NPV of the new GPS system?

Why is there a reaction on the urease agar : Why is there a reaction on the urease agar/broth, although there may be no significant growth? (urease test)

Bond amortization schedule using effective-interest method : Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization.

How the act of voting is personal responsibility of citizen : How the act of voting is personal responsibility of every citizen and citizens have social responsibility to consider how his individual vote will affect.

What is the expected rate of appreciation and depreciation : What is the expected rate of appreciation/depreciation for the USD? determine foreign exchange rates and their link to financial markets.

Determine which distribution fits the data best : STR and summary - How is it distributed (determine which distribution fits the data best?). Normal or binomial or... etc

What is the purpose of cooperation : What is the purpose of cooperation? Why do human beings cooperate? Is Kierkegaard's category of "the public" still relevant?

User Account

All Pages