On January 1,2018,a company sells a 3-year bond with a face value of $200,000 and a stated interest rate of 8%.Because the market interest rate is lower,the company receives $209,000 for the bond.Fill in Table A assuming the company uses the straight-line method of amortization.Fill in Table B assuming the company received only $194,000 for the bond and used the straight-line method of amortization.
Table A

\begin{array}{|l|l|l|l|l|l|l|}\hline \begin{array}{l}\text { Period } \\\text { Ended }\end{array} & \begin{array}{l}\text { Interest } \\\text { Payable }\end{array} & \begin{array}{l}\text { Amortization } \\\text { df premium }\end{array} & \begin{array}{l}\text { Interest } \\\text { Expense }\end{array} & \begin{array}{l}\text { Bonds } \\\text { Payable }\end{array} & \begin{array}{l}\text { Premium on } \\\text { Bonds } \\\text { Payable }\end{array} & \begin{array}{l}\text { Bonds } \\\text { Payable, } \\\text { including } \\\text { Premium }\end{array} \\\hline 01 / 01 / 18 & & & & & & \\\hline 12 / 31 / 18 & & & & & & \\\hline 12 / 31 / 19 & & & & & & \\\hline 12 / 31 / 20 & & & & & & \\\hline\end{array}

Table B

\begin{array}{|l|l|l|l|l|l|l|}\hline \begin{array}{l}\text { Period } \\\text { Ended }\end{array} & \begin{array}{c}\text { Interest } \\\text { Payable }\end{array} & \begin{array}{c}\text { Amortization } \\\text { of Discount }\end{array} & \begin{array}{c}\text { Interest } \\\text { Expense }\end{array} & \begin{array}{c}\text { Bonds } \\\text { Payable }\end{array} & \begin{array}{c}\text { Discount on } \\\text { Bonds } \\\text { Payable }\end{array} & \begin{array}{c}\text { Bonds } \\\text { Payable, net of } \\\text { discount }\end{array} \\\hline 01 / 01 / 18 & & & & & & \\\hline 12 / 31 / 18 & & & & & & \\\hline 12 / 31 / 19 & & & & & & \\\hline 12 / 31 / 20 & & & & & & \\\hline\end{array}

A Company Receives $102,000 When It Issues a Bond with a Face

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge