Solution-What will the bonds amortized cost be at the

What will the bonds amortized cost be at the maturity date

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Reference no: EM132757290

Question - Cullumber Corporation issued $380,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial amortization schedule for the first few years of the bond issue.

Semi-Annual Interest Period	Interest Payment	Interest Expense	Amortization	Bond Amortized Cost
Apr.1, 2020				$397,522
Oct. 1, 2020	$7,600	$5,963	$1,637	395,885
Apr. 1, 2021	7,600	5,938	1,662	394,223
Oct. 1, 2021	7,600	5,913	1,687	392,536
Apr. 1, 2022	7,600	5,888	1,712	390,824
Oct. 1, 2022	7,600	5,862	1,738	389,086
Apr. 1, 2023	7,600	5,836	1,764	387,322

Required -

1. What will the bonds' amortized cost be at the maturity date?

2. What will be the total interest payment over the five-year life of the bonds? Total interest expense?

3. Prepare the adjusting journal entry on December 31, 2020, assuming this is Cullumber's year end.

4. Prepare the journal entry for the payment of interest on April 1, 2021. Assume no reversing entries have been used.

Reference no: EM132757290

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What will the bonds amortized cost be at the maturity date

Reference no: EM132757290

Reference no: EM132757290

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