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Required informationExercise 10-15 Straight-Line: Amortization and accrued bondinterest expense LO P2[The following information...Required informationExercise...

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Accounting

Required information

Exercise 10-15 Straight-Line: Amortization and accrued bondinterest expense LO P2

[The following information applies to the questionsdisplayed below.]

Duval Co. issues four-year bonds with a $117,000 par value onJanuary 1, 2017, at a price of $112,870. The annual contract rateis 9%, and interest is paid semiannually on June 30 and December31.

Exercise 10-15 Part 1

1. Prepare an amortization table for thesebonds. Use the straight-line method of interest amortization.(Round your answers to the nearest dollaramount.)
  

SemiannualUnamortizedCarrying
Period-EndDiscountValue
6/01/2017
11/30/2017
5/31/2018
11/30/2018
5/31/2019
11/30/2019
5/31/2020
11/30/2020
5/31/2021

Answer & Explanation Solved by verified expert
3.9 Ratings (517 Votes)

  • All working forms part of the answer
  • Amount of Discount = $ 117,000 - $ 112,870 = $ 4,130
  • No. of period = 4 years x 2 semi annual payments = 8 periods
  • Discount to be amortised with each interest payment = 4130 / 8 = $ 516
  • Requirement

Semiannual Period-End

Amount of Discount amortised

Unamortized Discount

Carrying Value

[A: for understanding purpose]

[B = B – A]

[ C = C + A]

06-01-2017

$                       -  

$                       4,130

$        112,870

11/30/2017

$                    516

$                       3,614

$        113,386

5/31/2018

$                    516

$                       3,098

$        113,903

11/30/2018

$                    516

$                       2,581

$        114,419

5/31/2019

$                    516

$                       2,065

$        114,935

11/30/2019

$                    516

$                       1,549

$        115,451

5/31/2020

$                    516

$                       1,033

$        115,968

11/30/2020

$                    516

$                          516

$        116,484

5/31/2021

$                    516

$                              -  

$        117,000

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In: AccountingRequired informationExercise 10-15 Straight-Line: Amortization and accrued bondinterest expense LO P2[The following information...Required informationExercise 10-15 Straight-Line: Amortization and accrued bondinterest expense LO P2[The following information applies to the questionsdisplayed below.]Duval Co. issues four-year bonds with a $117,000 par value onJanuary 1, 2017, at a price of $112,870. The annual contract rateis 9%, and interest is paid semiannually on June 30 and December31.Exercise 10-15 Part 11. Prepare an amortization table for thesebonds. Use the straight-line method of interest amortization.(Round your answers to the nearest dollaramount.)  SemiannualUnamortizedCarryingPeriod-EndDiscountValue6/01/201711/30/20175/31/201811/30/20185/31/201911/30/20195/31/202011/30/20205/31/2021

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