Question

# Ayayai Company sells 10% bonds having a maturity value of \$1,400,000 for \$1,299,071. The bonds are...

Ayayai Company sells 10% bonds having a maturity value of \$1,400,000 for \$1,299,071. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.

Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 0 decimal places, e.g. 38,548.)

Schedule of Discount Amortization
Straight-Line Method
Year
Cash
Paid
Interest
Expense
Discount
Amortized
Carrying
Amount of Bonds
Jan. 1, 2017 \$

Jan. 1, 2018

Jan. 1, 2019

Jan. 1, 2020

Jan. 1, 2021

Jan. 1, 2022

Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 0 decimal places, e.g. 38,548.)

Schedule of Discount Amortization
Straight-Line Method

 Year Cash paid Interst expense Discount amortized Carrying amount on bonds Jan 1,2017 1299071 Jan 1,2018 140000 140000+20186 = 160186 20186 1319257 Jan 1,2019 140000 160186 20186 1339443 Jan 1,2020 140000 160186 20186 1359629 Jan 1,2021 140000 160186 20186 1379815 Jan 1,2022 140000 160185 20185 1400000

Discount amortized = 100929/5 = 20186

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