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Prepare the amortization schedule for the bonds

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Reference no: EM131876314

Please show the equation used to calculate the answers for the schedule below. For example, I will need to know how the cash received is calculated. Thank you!

On January 1, 2014, Novotna Company purchased $418,600, 8% bonds of Aguirre Co. for $371,271. The bonds were purchased to yield 11% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2019. Novotna Company uses the effective-interest method to amortize discount or premium. On January 1, 2016, Novotna Company sold the bonds for $372,875 after receiving interest to meet its liquidity needs.

Prepare the amortization schedule for the bonds.

Schedule of Interest Revenue and Bond Discount
Amortization-Effective-Interest Method
Bonds Purchased to Yield



Date

Interest Receivable
Or
Cash Received


Interest
Revenue

Bond
Discount
Amortization

Carrying
Amount of
Bonds
1/1/14

$
7/1/14

 

$

$

 
12/31/14

 

 

 

 
7/1/15

 

 

 

 
12/31/15

 

 

 

 
7/1/16

 

 

 

 
12/31/16

 

 

 

 
7/1/17

 

 

 

 
12/31/17

 

 

 

 
7/1/18

 

 

 

 
12/31/18

 

 

 

 
Total

$

$

$

Reference no: EM131876314

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