Question: Presented below is the partial bond discount amortization schedule for Rohr Corp., which uses the effective-interest method of amortization. Interest Bond Interest Interest to Expense

Presented below is the partial bond discount amortization schedule for Rohr Corp., which uses the effective-interest method of amortization.

Interest Bond Interest Interest to Expense to Discount Unamortized Carrying Periods Be Paid Be Recorded Amortization Discount Value Issue date $38,609 $961,391 1 $45,000 $48,070 $3,070 35,539 964,461 2 45,000 48,223 3,223 32,316 967,684 Instructions

(a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1.

(b) Explain why interest expense is greater than interest paid.

(c) Explain why interest expense will increase each period.

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