On June 1, 2014, the Critter Company sold $200,000 in long-term bonds for $175,520. The bonds will mature in 10 years, and have a stated interest rate of 8% and a yield (effective) rate of 10%. The bonds pay interest annually on May 31 of each year. The bond interest is accounted for using the effective interest method. Critter is on a calendar year and does not prepare reversing journal entries. If necessary, round all amounts to the nearest dollar. Required:(1) Complete the partial bond amortization table below. Carrying Value of$$ (2) Prepare journal entries on the following dates (omit journal entry explanations): June 1, 2014December 31, 2014May 31, 2015
AnswerFace Value of Bonds =$200,000Bond Discount=$200,000-$175,520=$24,4801) Bond Amortization table InterestInterestBalance [email protected] Expense Amortization In theIn the Value…
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