Question

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

Answer 1

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