Question

# Debt Issued at a Premium (Straight Line) On January 1, 2020, Ironman Steel issued \$1,400,000, 8-year...

Debt Issued at a Premium (Straight Line) On January 1, 2020, Ironman Steel issued \$1,400,000, 8-year bonds for \$1,456,000. The stated rate of interest was 7% and interest is paid annually on December 31.

Prepare the amortization table for Ironman Steel's bonds. If required, round your answers to nearest whole value. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0".

Ironman Steel Amortization Table Period

Cash Payment (Credit) Interest Expense (Debit) Premium on Bonds Payable (Debit) Premium on Bonds Payable Balance Carrying Value

At issue

12/31/20

12/31/21

12/31/22

12/31/23

12/31/24

12/31/25

12/31/26

12/31/27

 Period Cash Payment (Credit) Interest Expense (Debit) Premium on Bonds Payable (Debit) Premium on Bonds Payable Balance Carrying Value At issue 56000 1456000 12/31/20 98000 91000 7000 49000 1449000 12/31/21 98000 91000 7000 42000 1442000 12/31/22 98000 91000 7000 35000 1435000 12/31/23 98000 91000 7000 28000 1428000 12/31/24 98000 91000 7000 21000 1421000 12/31/25 98000 91000 7000 14000 1414000 12/31/26 98000 91000 7000 7000 1407000 12/31/27 98000 91000 7000 0 1400000 Note: Interest Cash Payment = 1400000*7% = \$98000 Annual premium amortization = 56000/8 = \$7000

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