Interest has accrued at 8% on the long-term notes payable since July 1, 2010. The next six-month interest payment at 9% on the bonds is due on March 1, 2011. The discount on bonds payable has not been amortized for any part of 2010; the bonds are dated March 1, 2004, and mature March 1, 2014. (Use straight-line).
I'm doing adjusting entry for the year end December 31, 2010.
Account Balances:
Notes Payable Acct. (LT Liability)
1/1 Balance 43,000
7/1 Increased Mortgage (credit 70,000) balance 113,000
Bonds Payable
1/1 (issued 3/1/04) 275000 (maturity 3/1/14)
Discount on bonds payable
1/1 4400
Interest Expense 4090
Interest Payable 4090
For the discount amortization would I just divide the remaining balance of discount on bonds payable by the remaining payments, or am I forgetting some steps. It does not seem like it should be that simple for some reason.