On December 31, 2020, Whitfield Corp. issued $ 500,000 8% bonds, due on December 31,...
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On December 31, 2020, Whitfield Corp. issued $ 500,000 8% bonds, due on December 31, 2025. Interest is to be paid semi-annually on June 30 and December 31. The bonds were sold at a market value of $461,390 to yield 10% effective annual interest. Whitfield has a calendar year end.
Required:
Complete the following amortization schedule for the dates indicated. Round all answers to the nearest dollar. Use the effective-interest method. (4marks)
Cash interest paid
Interest expense
Premium Amortization
Carrying amount of bonds
Dec. 31,2020
$461,390
June 30, 2021
Dec. 31, 2021
Prepare the journal entry for Whitfield at December 31, 2021, to record the payment of 6 months interest (from June 30 to December 31) and related expense. (3 marks)
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