Question

On June 1, 2019, Bramble Company sold $3,120,000 in long-term bonds for $2,736,600. 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.(*Please round interest expense and bond discount
columns to zero decimal places.)*

Answer #1

**Solution:**

Bond Amortization Schedule | |||||

Date | Cash Paid | Interest Expense | Discoount Amortized | Unamortized Discount | Carrying Value |

1-Jun-19 | $383,400 | $2,736,600 | |||

31-May-20 | $249,600 | $273,660 | $24,060 | $359,340 | $2,760,660 |

31-May-21 | $249,600 | $276,066 | $26,466 | $332,874 | $2,787,126 |

31-May-22 | $249,600 | $278,713 | $29,113 | $303,761 | $2,816,239 |

31-May-23 | $249,600 | $281,624 | $32,024 | $271,738 | $2,848,262 |

31-May-24 | $249,600 | $284,826 | $35,226 | $236,511 | $2,883,489 |

31-May-25 | $249,600 | $288,349 | $38,749 | $197,762 | $2,922,238 |

31-May-26 | $249,600 | $292,224 | $42,624 | $155,139 | $2,964,861 |

31-May-27 | $249,600 | $296,486 | $46,886 | $108,253 | $3,011,747 |

31-May-28 | $249,600 | $301,175 | $51,575 | $56,678 | $3,063,322 |

31-May-29 | $249,600 | $306,278 | $56,678 | $0 | $3,120,000 |

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