Shuttle Company issued $1,000,000, three-year, 10 percent bonds on January 1, year 1. The bond interest is paid each December 31 he end of the company's fiscal year. The bond was sold to yield 9 percent. Use Table 9C.1, Table 9C.2. (Round time value factor to decimal places.) Required: . Complete a bond payment schedule. Use the effective-interest amortization method. (Make sure that the unamortized discount/premium equals to 'O' and the Net Liability equals to face value of the bond in the last period. Interest expense in the period should be calculated as Cash Interest (+) discount / (-) premium amortized. Round intermediate and final answers to the hearest whole dollar.) Date 1/1/year 1 12/31/year 1 12/31/year 2 12/31/year 3 Interest expense Bonds payable Interest payment Bond Payment Schedule Interest Expense Cash Payment $ 100,000 100,000 100,000 Amortization of Premium 2. What amounts will be reported on the financial statements (statement of financial position, statement of earnings, and statement cash flows) for year 1, year 2, and year 3? (Round intermediate and final answers to the nearest whole dollar.) Year 1 Carrying Amount Year 2 Year 3
Shuttle Company issued $1,000,000, three-year, 10 percent bonds on January 1, year 1. The bond interest is paid each December 31 he end of the company's fiscal year. The bond was sold to yield 9 percent. Use Table 9C.1, Table 9C.2. (Round time value factor to decimal places.) Required: . Complete a bond payment schedule. Use the effective-interest amortization method. (Make sure that the unamortized discount/premium equals to 'O' and the Net Liability equals to face value of the bond in the last period. Interest expense in the period should be calculated as Cash Interest (+) discount / (-) premium amortized. Round intermediate and final answers to the hearest whole dollar.) Date 1/1/year 1 12/31/year 1 12/31/year 2 12/31/year 3 Interest expense Bonds payable Interest payment Bond Payment Schedule Interest Expense Cash Payment $ 100,000 100,000 100,000 Amortization of Premium 2. What amounts will be reported on the financial statements (statement of financial position, statement of earnings, and statement cash flows) for year 1, year 2, and year 3? (Round intermediate and final answers to the nearest whole dollar.) Year 1 Carrying Amount Year 2 Year 3
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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