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  3. on january 1, 2020, timber corporation issued $800

On January 1, 2020, Timber Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds...

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Accounting

On January 1, 2020, Timber Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on January 1. The company uses the effective-interest method of amortization.

(a)

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Prepare a bond discount amortization schedule which shows the amortization of discount for the first two interest payment dates. (Round answers to 0 decimal places, e.g. 5,275.)

TIMBERCORPORATION Bond Discount Amortization Effective-Interest MethodAnnual Interest Payments 6% Bonds Issued at 8%

Annual Interest Periods

Interest to Be Paid

Interest Expense

Discount Amortization

Unamortized Discount

Carrying Value of Bonds
Issue date

$

$

1

$

$

$

2

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