On January 1 of this year, Ikuta Company issued a bond with a face value...
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Accounting
On January 1 of this year, Ikuta Company issued a bond with a face value of $140,000 and a coupon rate of 6 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 7 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)
Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Cash Interest Interest Expense DiscountBook Value of Amortization Date Bond Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 22 December 31 Interest expense Bond liability Year 1 Year 2
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