On January 1 of this year, Ikuta Company issued a bond with a face value of $160,000 and a coupon rate of 4 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 5 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)

 

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Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Date Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Cash Interest December 31 Interest expense Bond liability Interest Expense Year 1 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Discount Amortization Year 2 Book Value of Bond Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Date Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Cash Interest December 31 Interest expense Bond liability Interest Expense Year 1 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Discount Amortization Year 2 Book Value of Bond

Answer rating: 100% (QA)

1 Year Cash Interest Interest Expense Dicount amortization Book Value of bond Jan 01 Year 1 155643 D... View the full answer