On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Date Credit Cash Debit Interest Expense Credit Bond Discount 6/1/24 $ 5/31/25 $ $ $ 5/31/26 5/31/27 5/31/28 Carrying Amount Bonds Ε
On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Date Credit Cash Debit Interest Expense Credit Bond Discount 6/1/24 $ 5/31/25 $ $ $ 5/31/26 5/31/27 5/31/28 Carrying Amount Bonds Ε
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 3P
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On June 1,2024 , Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to 0 decimal places, e.g. 25,000.) Date 61/24 531/25 531/26 531/27 5/31/28 Carrying Amount Debit Interest Expense Credit Bond Discount Bonds $ $ $
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