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Prepare an amortization table

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Question - On January 1, Year 1, Parker Company issued bonds with a face value of $61,000, a stated rate of interest of 10 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 12 percent at the time the bonds were issued. The bonds sold for $56,602. Parker used the effective interest rate method to amortize the bond discount.

Required -

1. Prepare an amortization table.

2. At what amount would the bond liability appear on the Year 4 balance sheet?

3. What item and amount in the table would appear on the Year 4 income statement?

4. On the Year 4 statement of cash flows (Direct Method)? Under which section of the statement of cash flows would this item appear?

Reference no: EM132600590

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