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Prepare the amortization schedule for the bond

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Reference no: EM133003369

Question - On January 1, 2020, Swifty Corporation purchased a newly issued $1,425,000 bond. The bond matured on December 31, 2022, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Swifty's fiscal year-end is October 31, and the company had the intention and ability to hold the bond until its maturity date. The bond will be accounted using the amortized cost model.

1- Calculate the price paid for the bond using a financial calculator or Excel functions.

2- Prepare the amortization schedule for the bond.

3- Prepare the journal entries on the books of Swifty Corporation for each of the following dates.

January 1, 2020

June 30, 2020

October 31, 2020

December 31, 2020

December 31, 2022 (two entries) one for interest and one for maturity of bond

Reference no: EM133003369

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