A Company Issued 10%,10-Year Bonds with a Par Value of $1,000,000

question 57

Essay

A company issued 10%,10-year bonds with a par value of $1,000,000 on January 1,2010,at a selling price of $885,295,to yield the buyers a 12% return.The company uses the effective interest amortization method.Interest is paid semiannually each June 30 and December 31.
(1)Prepare an amortization table for the first two payment periods using the format shown below:
$\begin{array}{|c|c|c|c|c|c|}\hline \begin{array}{c}\text { Semiannual } \\\text { Interest }\end{array} & \begin{array}{c}\text { Cash Interest } \\\text { Period }\end{array} & \begin{array}{c}\text { Bond Interest } \\\text { Expense }\end{array} & \begin{array}{c}\text { Discount } \\\text { Amortization }\end{array} & \begin{array}{c}\text { Unamortized } \\\text { Discount }\end{array} & \begin{array}{c}\text { Carrying } \\\text { Value }\end{array} \\\hline\end{array}$

(2)Prepare the journal entry to record the first semiannual interest payment.

---

Definitions:

Richest 20%

The segment of a population that holds the highest 20% of wealth or income.

Poorest 20%

Refers to the lowest quintile in an income distribution, representing the 20% of the population with the lowest income.

Faith Ringgold

Faith Ringgold is an American artist known for her narrative quilts that address issues of race, gender, and politics in the United States, blending visual art with story-telling.

Artistic Medium

The material or method used by an artist to create artwork, such as oil paint, sculpture, digital media, and more, each offering different possibilities and limitations for expression.