Prepare an effective-interest-method amortization table

Reference no: EM133371131

Case Study: On December 31, 2017, Hardcover Distributing issues 8%, 10-year convertible bonds with a maturity value of $600,000. The semiannual interest dates are June 30th and December 31st. The market interest rate is 9%, and the issue price of bonds is 94. Hardcover Distributing amortizes bond premium and discount by the effective-interest method.

Questions:

R1. Prepare an effective-interest-method amortization table for the first four semiannual interest periods.

R2. Journalize the following transactions: a. Issuance of the bonds on December 31, 2017 (Credit Convertible Bonds Payable) b. Payment of interest on June 30, 2018

Reference no: EM133371131

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