Cagney Company sold $248,000 of bonds on January 1, 2024. A portion of the amortization table follows. Period Cash Payment (Credit) Interest Expense (Debit) Discount on Bonds Payable (Credit) Discount on Bonds Payable Balance Carrying Value At issue $8,000 $240,000 06/30/24 $12,000 $12,800 $800 7,200 240,800 12/31/24 12,000 12,800 800 6,400 241,600 06/30/25 ? ? ? ? ? Required: 1. Determine the stated interest rate on these bonds. Round your answer to the nearest whole number. fill in the blank 1 % 2. Calculate the interest expense and the discount amortization for the interest period ending on June 30, 2025. Interest expense $fill in the blank 2 Discount amortization $fill in the blank 3 3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30, 2025. $fill in the blank 4
Cagney Company sold $248,000 of bonds on January 1, 2024. A portion of the amortization table follows. Period Cash Payment (Credit) Interest Expense (Debit) Discount on Bonds Payable (Credit) Discount on Bonds Payable Balance Carrying Value At issue $8,000 $240,000 06/30/24 $12,000 $12,800 $800 7,200 240,800 12/31/24 12,000 12,800 800 6,400 241,600 06/30/25 ? ? ? ? ? Required: 1. Determine the stated interest rate on these bonds. Round your answer to the nearest whole number. fill in the blank 1 % 2. Calculate the interest expense and the discount amortization for the interest period ending on June 30, 2025. Interest expense $fill in the blank 2 Discount amortization $fill in the blank 3 3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30, 2025. $fill in the blank 4
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 7MCQ
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Question
Cagney Company sold $248,000 of bonds on January 1, 2024. A portion of the amortization table follows.
| Period | Cash Payment (Credit) |
Interest Expense (Debit) |
Discount on Bonds Payable (Credit) |
Discount on Bonds Payable Balance |
Carrying Value |
| At issue | $8,000 | $240,000 | |||
| 06/30/24 | $12,000 | $12,800 | $800 | 7,200 | 240,800 |
| 12/31/24 | 12,000 | 12,800 | 800 | 6,400 | 241,600 |
| 06/30/25 | ? | ? | ? | ? | ? |
Required:
1. Determine the stated interest rate on these bonds. Round your answer to the nearest whole number.
fill in the blank 1 %
2. Calculate the interest expense and the discount amortization for the interest period ending on June 30, 2025.
| Interest expense | $fill in the blank 2 |
| Discount amortization | $fill in the blank 3 |
3. Calculate the liability balance shown on a
$fill in the blank 4
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