Question

On January 1, 2020, Kingbird Inc. issued $350,000 of 6-year, 3% bonds to yield a market interest rate of 4%. Interest is paid every quarter on January 1, April 1, July 1, and October 1. Kingbird has a calendar year end. After recording the December 31, 2021 accrual for quarterly interest, and making the payment on January 1, 2022, all the bonds were redeemed at 101.

Prepare a bond amortization schedule for the first two years (8 interest periods). (Round answers to 0 decimal places, e.g. 5,276.) KINGBIRD INC. Bond Discount Amortization Schedule Effective-Interest Method Semi-Annual Interest Period Interest Payment Interest Expense Amortization Bond Amortized Cost Issue Date, Jan. 1, 2020 $ Apr. 1, 2020 $ $ $ $ Jul. 1, 2020 Oct 1, 2020 Dec. 31, 2020 (accrual) Apr. 1, 2021 Jul. 1, 2021 Oct 1, 2021 Dec. 31, 2021 (accrual)

Answer 1

Face Amount	$350,000
Interest Payment	$350,000*3%*3/12 =$2,625
Market Interest rate per period	1.00%
Cash Flow	Table Value(PV of 1% for 24 period)	Amount	Present Value
PV of Interest	21.24339	$2,625	$55,764
PV of Principal	0.78757	$3,50,000	$2,75,650
PV of Bonds Payable(Issue Price)			$3,31,413
Amortization Table-As per Effective Interest method
Date	Interest paid($350,000*3%*3/12)	Interest expenses(Bond carrying amount*4%*3/12)	Discount amortized	Bond carrying amount
Col I	Col II	Col III	Col IV(Col III - Col II)	Col V
Jan 1,2020				$                             3,31,413
Apr 1,2020	$                                                               2,625	$                                                                        3,314	$                                                    689	$                             3,32,102
Jul 1,2020	$                                                               2,625	$                                                                        3,321	$                                                    696	$                             3,32,798
Oct 1,2020	$                                                               2,625	$                                                                        3,328	$                                                    703	$                             3,33,501
Dec 31,2020	$                                                               2,625	$                                                                        3,335	$                                                    710	$                             3,34,211
Apr 1,2021	$                                                               2,625	$                                                                        3,342	$                                                    717	$                             3,34,928
Jul 1,2021	$                                                               2,625	$                                                                        3,349	$                                                    724	$                             3,35,653
Oct 1,2021	$                                                               2,625	$                                                                        3,357	$                                                    732	$                             3,36,384
Dec 31,2021	$                                                               2,625	$                                                                        3,364	$                                                    739	$                             3,37,123