Question: PREPARING A BOND AMORTIZATION TABLE (STRAIGHT LINE) On December 31, 2012, Distel Company borrowed $25,900 by issuing three-year, 8.5 percent bonds with a face amount

PREPARING A BOND AMORTIZATION TABLE (STRAIGHT LINE)

On December 31, 2012, Distel Company borrowed $25,900 by issuing three-year, 8.5 percent bonds with a face amount of $25,000. The bonds require annual interest payments (each equal to 8.5 percent of $25,000).

Required:

Prepare an amortization table using the following column headings:

Period Cash Payment

(Credit)

Interest Expense

(Debit)

Premium on Bonds Payable

(Debit)

Premium on Bonds Payable Balance Carrying Value

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