Shamrock Company sells 10% bonds having a maturity value of $1,400,000 for $1,299,071. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Set up a schedule of interest expense and discount amortization under the straight-line method.
Schedule of Discount Amortization
Straight-Line Method |
Year |
Cash
Paid |
Interest
Expense |
Discount
Amortized |
Carrying
Amount of Bonds |
| Jan. 1, 2017 |
$ |
$ |
$ |
$ 1,299,071 |
| Jan. 1, 2018 |
140000 |
|
|
|
| Jan. 1, 2019 |
140000 |
|
|
|
| Jan. 1, 2020 |
140000 |
|
|
|
| Jan. 1, 2021 |
140000 |
|
|
|
| Jan. 1, 2022 |
140000 |
|
|
1400000
|