eBook Calculator Cornerstone Exercise 9-27 (Algorithmic) Debt Issued at a Discou

Question

eBook Calculator Cornerstone Exercise 9-27 (Algorithmic) Debt Issued at a Discount (Straight Line) On January 1, 2020 Drew Company issued $400,000 5-year bonds for $368,000. The stated rate of interest was 8% and interest is paid annually on December 31. Required Prepare the amortization table for Drew Company's bonds. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0. Drew Company Amortization Table Period Cash Payment (Credit) Interest Expense (Debrt) Discount on Bonds Payable (Credr) Discount on Bonds Payable Balance Carying Value At issue 12/31/20( 32.000? ( 38.400 | v { 12/31/21 32.00038.4006,400 12/31/22(32.000 v 138,4001 v {e 400| 12/31/23 32.000 368,000 374400 380.800! 387.200 v 393,600 400.000 6.400 v 25.600 38400 38.400 38.400 6400 6.400 6400 12/3124 32000 Chack My Work Check My Work Previous Next Alt work saved. 1203 PM 0 7/11/2018

Explanation / Answer

Period Cash payment Interest expense Discount on Bonds payable Discount on Bonds payable balance Carrying value At issue 0 0 0 32000 368000 12/31/2020 32000 38400 6400 25600 374400 12/31/2021 32000 38400 6400 19200 380800 12/31/2022 32000 38400 6400 12800 387200 12/31/2023 32000 38400 6400 6400 393600 12/31/2024 32000 38400 6400 0 400000

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