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Effective Interest Amortization On December 31, Caper, Inc., issued $250,000 of eight percent, ten-year bonds for $218,844, yielding an effective interest rate of ten percent. Semiannual interest is payable on June 30 and December 31 each year. The firm uses the effective interest method to amortize the discount. Required a. Prepare an amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar. b. Prepare the journal entry for the bond issuance on December 31. c. Prepare the journal entry to record the bond interest payment and discount amortization at June 30 of the following year. d. Prepare the journal entry to record the bond interest payment and discount amortization at December 31 of the following year. a. Interest Period Year Balance Book Valu Interest Interest Periodic of Unamortized of Bonds Paid Expense Amortization Discount End of Per $ 0 $ 0 $ 0 $ 31,156 $ 218, 10,000 $ 10,942 $ 942 30,214 219,71 at issue 1 a. Year at issue 1 Balance Book Valu Interest Interest Interest Periodic of Unamortized of Bonds Period Paid Expense Amortization Discount End of Perid $ 0 $ 0$ 0$ 31,156 $ 218,8 1 $ 10,000 $ 10,942 $ 942 30,214 219,7 2 10,000 10,989 989 31,203 220,7 General Journal Description Debit Date b. Dec.31 Cash 0 0 0 To record issuance of bonds. C. Jun.30 0 0 0 Cash To record semiannual interest paymentand discount amortization. d. Der 21 General Journal Description Debit Date b. Dec.31 Cash 0 0 e e 0 To record issuance of bonds. c. Jun.30 0 0 0 Cash To record semiannual interest paymentand discount amortization. d. Dec.31 0 0 0 Cash To record semiannual interest paymentand discount amortization. General Journal Description Debit Credit Cash 0 0 0 () 0 0 o record issuance of bonds. 0 0 0 0 0 Cash o record semiannual interest paymentand discount amortization. 0 0 0 0 Cash o record semiannual interest paymentand discount amortization

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