Prepare a bond discount amortization schedule

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Reference no: EM132605351

On December 31, 2021, Galley Corporation issued $800,000, 6%, 5-year bonds for $735,100. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on December 31. The company uses the effective-interest method of amortization.

Required:

Question 1) can you prepare a bond discount amortization schedule which shows the amortization of discount for the first two interest payment dates. (Round to the nearest dollar.)

Question 2) can you prepare the journal entries that Galley Corporation would make on December 31, 2021, December 31, 2022 and December 31, 2023 related to the bond issue.

Reference no: EM132605351

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