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.)

Semiannual Unamortized Carrying
Period-End Discount Value
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