How should the bonds be shown on McVay's December 31, 2011, balance sheet and on its December 31, 2012, balance sheet? © BrainMass Inc. Prepare journal entries to record the first four semiannual interest payments.Ĥ. Using the effective interest method, prepare an amortization schedule showing interest expense, discount or premium amortization, and bond carrying value for each of the first four semiannual interest payment periods.ģ. The market rate of interest on July 1, 2011, for bonds of this type was 10%. The table is commonly used by the issuers of bonds to assist them in accounting for these instruments over time. The bonds pay interest semiannually on June 30 and December 31 of each year. JanuWhat is a Bond Amortization Schedule A bond amortization schedule is a table that shows the amount of interest expense, interest payment, and discount or premium amortization of a bond in each successive period. On July 1, 2011, McVay Corporation issued $15 million of 10-year bonds with an 8% stated interest rate. The effective interest rate method uses the market interest rate at the time that the bond was issued. Interest Expense (Bond Issued at Discount) I + D Interest Expense (Bond. Under the straight-line method, bond discount or premium is amortized equally in each period over the tenor of the bond. This content was COPIED from - View the original, and get the already-completed solution here! The periodic amortization of discount or premium equals the difference between interest expense and payment. Not what you're looking for? Search our solutions OR ask your own Custom question.
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