Determine the stated interest rate on the bonds

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Reference no: EM13941000

COMPLETING A DEBT AMORTIZATION TABLE (STRAIGHT LINE)

Cagney Company sold $200,000 of bonds on December 31, 2008. A portion of the amortization table appears below.

Period

Cash Payment (Credit)

Interest Expense (Debit)

Discount on Bonds Payable (Credit)

Discount on Bonds Payable Balance

Carrying Value

At issue

 

 

 

$6,000

$194,000

6/30/09

$11,000

$11,600

$600

5,400

194,600

12/31/09

11,000

11,600

600

4,800

195,200

6/30/10

?

?

?

?

?

Required:

1. Determine the stated interest rate on these bonds.

2. Calculate the interest expense and the discount amortization for the interest period ending June 30, 2010.

3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30, 2010.

Reference no: EM13941000

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