Solution-Explain why interest expense is greater than

Explain why interest expense is greater than interest paid

Reference no: EM13531906

Presented below is the partial bond discount amortization schedule for Syam Corp., which uses the effective-interest method of amortization.

		Interest			Bond
Interest	Interest to	Expense to	Discount	Unamortized	Carrying
Periods	Be Paid	Be Recorded	Amortization	Discount	Value
Issue date				$38,609	$961,391
1	$45,000	$48,070	$3,070	35,539	964,461
2	45,000	48,223	3,223	32,316	967,684

Instructions

(a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1.

(b) Explain why interest expense is greater than interest paid.

Reference no: EM13531906

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Explain why interest expense is greater than interest paid

Reference no: EM13531906

Reference no: EM13531906

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