1. 150 points value: Problem 10-228 [LO 10-S2] On January 1, 2016, a company iss

Question

1. 150 points value: Problem 10-228 [LO 10-S2] On January 1, 2016, a company issues 3-year bonds with a face value of $190,000 and a stated interest rate of 7%. Because the market interest rate is 5%, the company receives $200,347 for the bonds. Required Fill in the table assuming the company uses effective-interest bond amortization. (Round your answers to the nearest whole dollar.) Table Amort InterestAmortized BondsPremium on Carrying Expense Premium Ended Cash Paid 01/01/2016 12/31/2016 12/31/2017 12/31/2018 PayableBonds Payable Value

Explanation / Answer

Period Ended Cash Paid Interest Expense Amortized Premium Bonds Payable Premium on Bonds Payable Carrying Value 1/1/2016                                    -                     -                         -            190,000          10,347          200,347 12/31/2016                          13,300          10,017                3,283          190,000            7,064          197,064 12/31/2017                          13,300            9,853                3,447          190,000            3,617          193,617 12/31/2018                          13,300            9,683                3,617          190,000                  (0)          190,000

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