On January 1, Year 1, Hart Company issued bonds with a face value of $150,000, a stated rate of interest of 8 percent, and a five- year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 7 percent at the time the bonds were issued. The bonds sold for $156,150. Hart used the effective interest rate method to amortize the bond premium. (Round your intermediate calculations and final answers to the nearest whole number.) Required a. Prepare an amortization table. Premium Amortization Carrying Value Cash Interest Date Payment Expense January 1, Year 1 156,150 December 31, Year 1 12,000 10,931 1,069 155,081 December 31, Year 2 December 31, Year 3 December 31, Year 4 December 31, Year 5 Totals

On January 1, Year 1, Hart Company issued bonds with a face value of $150,000, a stated rate of interest of 8 percent, and a five- year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 7 percent at the time the bonds were issued. The bonds sold for $156,150. Hart used the effective interest rate method to amortize the bond premium. (Round your intermediate calculations and final answers to the nearest whole number.) Required a. Prepare an amortization table. Premium Amortization Carrying Value Cash Interest Date Payment Expense January 1, Year 1 156,150 December 31, Year 1 12,000 10,931 1,069 155,081 December 31, Year 2 December 31, Year 3 December 31, Year 4 December 31, Year 5 Totals

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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