ar 1 $ $ $ A 3,600 $ 3,600 $ 3,600 $ $ 3 600 3,417 $ 3,404 $ 3,390 $ 3 376 $ $ $ 183 196 $ 210 $ 224 $
ar 1 $ $ $ A 3,600 $ 3,600 $ 3,600 $ $ 3 600 3,417 $ 3,404 $ 3,390 $ 3 376 $ $ $ 183 196 $ 210 $ 224 $
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter22: Corporations: Bonds
Section: Chapter Questions
Problem 2CE
Related questions
Question
Please let me know how I can find out whether something is premium or a discount. It would also be really helpful if you included the formula for both if there is one?
Please answer the question in the picture I have attached another one with the completed chart in case it is needed.
![Required information
[The following information applies to the questions displayed below.]
On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds
mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed
amortization schedule below pertains to the bonds:
Date
January 1, Year 1
End of Year 1
End of Year 2
End of Year 3
End of Year 4
Cash
Premium
$ 3,600
?
?
?
Interest
$ 3,417
?
?
3,376
Amortization
$ 183
?
210
?
Balance
$ 48,813
48,630
48,434
?
48,000
4. Were the bonds issued at a premium or a discount? If so, what was the amount of the premium or discount?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c804e19-c719-4121-8bdd-4a25baf766df%2F33bcb986-d455-47da-8df5-2f4486145d0b%2Fxbcbwbj_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds
mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed
amortization schedule below pertains to the bonds:
Date
January 1, Year 1
End of Year 1
End of Year 2
End of Year 3
End of Year 4
Cash
Premium
$ 3,600
?
?
?
Interest
$ 3,417
?
?
3,376
Amortization
$ 183
?
210
?
Balance
$ 48,813
48,630
48,434
?
48,000
4. Were the bonds issued at a premium or a discount? If so, what was the amount of the premium or discount?
Transcribed Image Text:Date
January 1, Year 1
End of Year 1
End of Year 2
End of Year 3
End of Year 4
$
$
Cash
3,600
3,600 $
3,600
$
3,600
$
Interest
Amortization
SA
3,417
3,404 $
3,390 $
3,376
$
183
196
$
210
$
224 $
Balance
48,813
48,630
48,434
48,224
48,000
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