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Chrome File Edit View History Bookmarks People Window Help Chapter 10-Connect x 0 March Madness®-XFINITY 4-? jack C ?Not Secure ezto.mheducation.com/hm.tpx Acct 1201 Spring 2018: Acct 1201 Spring 2018 ACCOUNTING anter 10-Connect instructions I help Questions 7-15(of 15) ?| save & Exit 11 Submit Time remalning: 1:56:06 The following information applies to the questions displayed below. 1 of this year,Olive Corporation issued bonds, Interest is payable once a year on December 31. The bonds amortization method. The partially completec mature at the end of four years. Olive uses the effective-interest amortization schedule below pertains to the bonds Date Cash Interest January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 58,998 58,771 58,530 3,944 3,717 s 227 257 3,671 58,000 Required Information value: 6.66 points 1. Complete the amortization schedule. (Enter all your values in positive. Round your final answers to nearest whole dollar amount.) Required: Balance $58,998 Interest Amortization Date Cash January 1, Year 1

Explanation / Answer

6)coupon rate = Interest paid /Face value

                    = 3944/58000

                     = .068 or 6.8%

7)Market rate =Interest expense /carrying value at beginning

               3717 /58998

            = .063 or 6.30%

8)Year 2 : Last carrying value *market rate
                 = 58771*.063

                  = 3702.57 [Rounded to 3703]

Year 3 :58530*.063 = $ 3687

9)Bond payable to be reported in

Year2 : 58530

Year 3 :Last carrying valaue -amortisation

            = 58530-257

               = 58273

**Amortisation for year3 :3944-3687 =257

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