On June 1, 2017, Griffin Company issued $294,000 of 20-year, 7% bonds at 112. The bonds...

On June 1, 2017, Griffin Company issued $294,000 of 20-year, 7% bonds at 112. The bonds were dated June 1, 2017, and pay interest on June 1 and December 1. Griffin Company uses the straight-line method to amortize the discount or premium. Required: Assuming that the entry to amortize the discount or premium to date has been made, what is the carrying value of the bonds on December 31, 2023?

Expert Solution

Carrying value of the bonds on December 31, 2023 = $ 331,926

Period	Cash payment (Credit)	Interest Expense (Debit)	Discount on bond	Premium on bond balance	Bonds payable Carrying Value
June 1 2017				$ 35,280	$ 3,29,280
Dec 31 2017	$ 10,290	$ 9,408	$ 882	$ 34,398	$ 3,28,398
June 1 2018	$ 10,290	$ 9,408	$ 882	$ 33,516	$ 3,27,516
Dec 31 2018	$ 10,290	$ 9,408	$ 882	$ 32,634	$ 3,26,634
June 1 2019	$ 10,290	$ 9,408	$ 882	$ 31,752	$ 3,25,752
Dec 31 2019	$ 10,290	$ 9,408	$ 882	$ 30,870	$ 3,24,870
June 1 2020	$ 10,290	$ 9,408	$ 882	$ 29,988	$ 3,25,752
Dec 31 2020	$ 10,290	$ 9,408	$ 882	$ 29,106	$ 3,26,634
June 1 2021	$ 10,290	$ 9,408	$ 882	$ 28,224	$ 3,27,516
Dec 31 2021	$ 10,290	$ 9,408	$ 882	$ 27,342	$ 3,28,398
June 1 2022	$ 10,290	$ 9,408	$ 882	$ 26,460	$ 3,29,280
Dec 31 2022	$ 10,290	$ 9,408	$ 882	$ 25,578	$ 3,30,162
June 1 2023	$ 10,290	$ 9,408	$ 882	$ 24,696	$ 3,31,044
Dec 31 2023	$ 10,290	$ 9,408	$ 882	$ 23,814	$ 3,31,926

.

Bond issue price	$ 3,29,280.00
Face value	$ 2,94,000.00
Premium on Bonds payable	$ (35,280.00)
Number of Interest payments (20 years x 2)	40
Discount to be amortized per payment	$ (882.00)

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