On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. The bonds were issued for $1,851,234. a. Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method. Round answers to the nearest dollar. Enter all amounts as positive numbers. Amortization Table The Effective Interest Rate Method Interest Paid Interest Expense Amortization Bond Carrying Amount Date 1/1/Year 1 6/30/Year 1 12/31/Year 1 6/30/Year 2 12/31/Year 2 b. Show how this bond would be reported on the balance sheet at December 31, Year 2. Kennard Co. Partial Balance Sheet

On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. The bonds were issued for $1,851,234. a. Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method. Round answers to the nearest dollar. Enter all amounts as positive numbers. Amortization Table The Effective Interest Rate Method Interest Paid Interest Expense Amortization Bond Carrying Amount Date 1/1/Year 1 6/30/Year 1 12/31/Year 1 6/30/Year 2 12/31/Year 2 b. Show how this bond would be reported on the balance sheet at December 31, Year 2. Kennard Co. Partial Balance Sheet

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 15MCQ

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