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On January 2, 2017, Omni Industries Inc. issued $4,000,000 of 8.5 percent, 5-year bonds when the market interest rate was

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On January 2, 2017, Omni Industries Inc. issued $4,000,000 of 8.5 percent, 5-year bonds when the market interest rate was 10 percent. Omni Industries pays interest annually on December 31. The issue price of the bonds was $3,772,553.
On January 2, 2017, Omni Industries Inc. issued $4,000,000 of

Required
Create a spreadsheet model to prepare a schedule to amortize the discount on these bonds. Use the effective-interest method of amortization. Round to the nearest dollar, and format your answer as follows:

Transcribed Image Text:

10% Unamortized Bond Interest Payment Interest Discount Discount Carrying Amount Date Expense Amortization Balance 5 Jan. 2, 2017 6 Dec. 31, 2017 $ 7 Dec. 31, 2018 8 Dec. 31, 2019 9 Dec. 31, 2020 10 Dec. 31, 2021 $227,447 $3,772,553 -4,000,000*.085-F5*.010 C6-B6 E5-D6F5+D6

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ISBN: 978-0133855388

10th Canadian edition Volume 2

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood

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Question Posted: April 26, 2017 08:43:22
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