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Teal Mountain Inc., a private company following ASPE, is having difficulty meeting its working capital...

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Accounting

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Teal Mountain Inc., a private company following ASPE, is having difficulty meeting its working capital requirements. As a result, on January 1, 2020, the company sold bonds with a face value of $2.05 million, receiving $1,850,000 in cash. The bonds have an interest rate of 12% and mature on January 1, 2022. Interest is payable semi-annually on January 1 and July 1. Set up a schedule of interest expense and discount amortization under the straight-line method. Credit Interest Payable Schedule of Discount Amortization Straight-Line Method Debit Credit Interest Bond Expense Payable Carrying Amount of Bonds Year Jan. 1, 2020 July 1, 2020 Dec. 31, 2020 July 1, 2021 Dec. 31, 2021

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