Colwood Candies issued $370,000 of 12%, five-year bonds on January 1, 2020, when the market interest rate was 16%. The company pays interest annually at year-end. The issue price of the bonds was $321,540. Requirement Create a spreadsheet model to prepare a schedule to amortize the bonds. Use the effective-interest method of amortization. Round to the nearest dollar Requirement. Create a spreadsheet model to prepare a schedule to amortize the bonds. Use the effective-interest method of amortization (Round your final answer to the nearest dollar. For amounts w zero balance, enter a 0 where appropriate.) A B C Interest Payment Interest Expense (16% of (12% of Maturity Value) Preceding Bond Carrying Amount) Date 1-1-2020 12-31-2020 S 12-31-2021 12-31-2022 12-31-2023 12-31-2024 44,400 44,400 44,400 44,400 44,400 51446 52574 53882 55399 56838 D Discount Amortization Discount Balance (C-B) (Preceding E-D) 48460 41414 33240 22758 11759 E 7046 8174 9482 10999 12438 F Bond Carrying Amount ($370,000-E) 321540 328586 336760 346242 355243 367682
Colwood Candies issued $370,000 of 12%, five-year bonds on January 1, 2020, when the market interest rate was 16%. The company pays interest annually at year-end. The issue price of the bonds was $321,540. Requirement Create a spreadsheet model to prepare a schedule to amortize the bonds. Use the effective-interest method of amortization. Round to the nearest dollar Requirement. Create a spreadsheet model to prepare a schedule to amortize the bonds. Use the effective-interest method of amortization (Round your final answer to the nearest dollar. For amounts w zero balance, enter a 0 where appropriate.) A B C Interest Payment Interest Expense (16% of (12% of Maturity Value) Preceding Bond Carrying Amount) Date 1-1-2020 12-31-2020 S 12-31-2021 12-31-2022 12-31-2023 12-31-2024 44,400 44,400 44,400 44,400 44,400 51446 52574 53882 55399 56838 D Discount Amortization Discount Balance (C-B) (Preceding E-D) 48460 41414 33240 22758 11759 E 7046 8174 9482 10999 12438 F Bond Carrying Amount ($370,000-E) 321540 328586 336760 346242 355243 367682
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 15MCQ
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