On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. Use the following format and round figures to nearest dollar. The bonds were issued for $1,851,234.

(a) Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method.
Date Interest Paid Interest Expense Amortization Bond Carrying Amount

(b) Show how this bond would be reported on the balance sheet at December 31, Year 2.

Question

On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. Use the following format and round figures to nearest dollar. The bonds were issued for $1,851,234.
​
(a) Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method.
Date Interest Paid Interest Expense Amortization Bond Carrying Amount
​
(b) Show how this bond would be reported on the balance sheet at December 31, Year 2.

Quizplus · Accepted Answer

The Answer of On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. Use the following format and round figures to nearest dollar. The bonds were issued for $1,851,234.
​
(a) Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method.
Date Interest Paid Interest Expense Amortization Bond Carrying Amount
​
(b) Show how this bond would be reported on the balance sheet at December 31, Year 2.