In: Accounting
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?
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) |