Question

Swifty Co. sells $435,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Swifty buys back $130,500 worth of bonds for $136,500 (includes accrued interest). Give entries through December 1, 2022.

Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)

Schedule of Bond Discount Amortization Effective-Interest Method Bonds Sold to Yield
Date		Cash Paid		Interest Expense		Premium Amortized		Carrying Amount of Bonds
6/1/20		$		$		$		$
12/1/20
6/1/21
12/1/21
6/1/22
12/1/22
6/1/23
12/1/23
6/1/24

* Difference due to rounding

Answer 1