Please show the equation used to calculate the answers for the schedule below. For example, I will need to know how the cash received is calculated. Thank you!
On January 1, 2014, Novotna Company purchased $418,600, 8% bonds of Aguirre Co. for $371,271. The bonds were purchased to yield 11% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2019. Novotna Company uses the effective-interest method to amortize discount or premium. On January 1, 2016, Novotna Company sold the bonds for $372,875 after receiving interest to meet its liquidity needs.
Prepare the amortization schedule for the bonds.
|
Schedule of Interest Revenue and Bond Discount
Amortization-Effective-Interest Method
Bonds Purchased to Yield
|
|
Date
|
Interest Receivable
Or
Cash Received
|
Interest
Revenue
|
Bond
Discount
Amortization
|
Carrying
Amount of
Bonds
|
| 1/1/14 |
$
|
| 7/1/14 |
|
$
|
$
|
|
| 12/31/14 |
|
|
|
|
| 7/1/15 |
|
|
|
|
| 12/31/15 |
|
|
|
|
| 7/1/16 |
|
|
|
|
| 12/31/16 |
|
|
|
|
| 7/1/17 |
|
|
|
|
| 12/31/17 |
|
|
|
|
| 7/1/18 |
|
|
|
|
| 12/31/18 |
|
|
|
|
| Total |
$
|
$
|
$
|
|