Question

# On June 1, 2019, Blossom Company sold \$3,660,000 in long-term bonds for \$3,210,200. The bonds will...

On June 1, 2019, Blossom Company sold \$3,660,000 in long-term bonds for \$3,210,200. 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.

 Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31.
 Date Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amount of Bonds 6/1/19 \$ 5/31/20 \$ \$ \$ 5/31/21 5/31/22 5/31/23

 Date Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amount of Bonds 6/1/19 3210200 5/31/20 292800 321020 28220 3238420 5/31/21 292800 323842 31042 3269462 5/31/22 292800 326946 34146 3303608 5/31/23 292800 330361 37561 3341169
 Workings: Cash interest 292800 =3660000*8% Interest expense: 5/31/20 321020 =3210200*10% 5/31/21 323842 =3238420*10% 5/31/22 326946 =3269462*10% 5/31/23 330361 =3303608*10%

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