On January 1, 2014, Pitre Incorporated issued bonds with a face value of $120,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on Dec ember 31 of each year. The effective rate of interest was 7 percent at the time the bonds were issued. The bonds sold for $124,920. Pitre used the effective interest rate method to amortize bond discount.

Required
a. Prepare an amortization table as shown below:

b. What item(s) in the table would appear on the 2015 balance sheet?
c. What item(s) in the table would appear on the 2015 income statement?
d. What item(s) in the table would appear on the 2015 statement of cashflows?

Carrying Interest Payment Expense Premium Amortization 124,920 124,064 January 1, 2014 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 Totals 9,600 8,744 48,000 43,080 4,920