Required information

P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5

Skip to question

[The following information applies to the questions displayed below.]

On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds:

Date	Cash			Interest			Amortization				Balance
January 1, Year 1											$	38,636
End of Year 1	$	3,040		$	2,898		$	142				38,494
End of Year 2		?			?			?				38,341
End of Year 3		?			?			164				?
End of Year 4		?			2,863			?				38,000

P10-10 Part 1

Required:

1. Complete the amortization schedule. (Enter all your values in positive. Round your final answers to nearest whole dollar amount.)

Date	Cash	Interest	Amortization	Balance
January 1, Year 1				$38,636
End of Year 1	$3,040	$2,898	$142	$38,494
End of Year 2	$3,040			$38,341
End of Year 3	$3,040		$164
End of Year 4	$3,040	$2,863		$38,000

*explain how to calculate / eqaution

2. When the bonds mature at the end of Year 4, what amount of principal will Olive pay investors?

Principal amount