Problem: Cardinals Co issued $900,000 of 8%, 4-year bonds on 6/1/05 at {96} plus accrued interest. The bonds mature on 3/1/09, and pay interest each 3/1 and 9/1. The straight line method is used to amortize any discount or premium.
Compute the:
1) Amount of interest expense reported FYE 12/31/05
2) Balance of the discount account at 12/31/05
3) Carry value of the bond at 12/31/06