Question - On January 1, 2018, White Water issues $400,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year.
Assuming the market interest rate on the issue date is 4%, the bonds will issue at $444,793.
Required -
1. Compete the first three rows of an amortization table.
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Date
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Cash Paid
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Interest Expense
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Decrease in Carrying Value
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Carrying Value
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1/1/18
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6/30/18
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12/31/18
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2. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018.