Question

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%. Use the following format and round figures to nearest dollar. 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.

Interest Discount UnamortizedBond
Date Cash Paid Expense Amortization Discount Carrying Value

​b. Show how this bond would be reported on the balance sheet at December 31, Year 2.

Answer

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