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Bond Amortization and adjusting entry. Use excel to create an amortization table for 10 years and...

Bond Amortization and adjusting entry. Use excel to create an amortization table for 10 years and show the adjusting entry for the bond payable for the June payment. Show calculations.

Had issued $1,500,000 of 4%, 10-year bond, dated 1/1/18 for $1,383,079 when the market rate was 5%. Interest is paid on June 30 and January 1 using the effective interest rate method. The June payment is included in the Dec. 1 TB.

Trial Balance

December 1, 2021

Description Debit Credit
Bond Payable 1,500,000
Discount on Bond Payable 82,377

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ekkarill92 answered 1 year ago
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Amortization Table-As per Effective Interest method
Date Cash Interest paid($1,500,000*4%*6/12) Interest expenses(Bond carrying amount*2.5%) Discount amortized Unamortized Discount Bond carrying amount
Col I Col II Col III Col IV(Col III - Col II) Col VI
Jan 1/2018 $                              116,921 $                       1,383,079
Jun 30/2018 $                                                                          30,000 $                                                          34,577 $                                            4,577 $                              112,344 $                       1,387,656
Dec 31/2018 $                                                                          30,000 $                                                          34,691 $                                            4,691 $                              107,653 $                       1,392,347
Jun 30/2019 $                                                                          30,000 $                                                          34,809 $                                            4,809 $                              102,844 $                       1,397,156
Dec 31/2019 $                                                                          30,000 $                                                          34,929 $                                            4,929 $                                97,915 $                       1,402,085
Jun 30/2020 $                                                                          30,000 $                                                          35,052 $                                            5,052 $                                92,863 $                       1,407,137
Dec 31/2020 $                                                                          30,000 $                                                          35,178 $                                            5,178 $                                87,684 $                       1,412,316
Jun 30/2021 $                                                                          30,000 $                                                          35,308 $                                            5,308 $                                82,377 $                       1,417,623
Dec 31/2021 $                                                                          30,000 $                                                          35,441 $                                            5,441 $                                76,936 $                       1,423,064
Jun 30/2022 $                                                                          30,000 $                                                          35,577 $                                            5,577 $                                71,359 $                       1,428,641
Dec 31/2022 $                                                                          30,000 $                                                          35,716 $                                            5,716 $                                65,643 $                       1,434,357
Jun 30/2023 $                                                                          30,000 $                                                          35,859 $                                            5,859 $                                59,784 $                       1,440,216
Dec 31/2023 $                                                                          30,000 $                                                          36,005 $                                            6,005 $                                53,779 $                       1,446,221
Jun 30/2024 $                                                                          30,000 $                                                          36,156 $                                            6,156 $                                47,624 $                       1,452,376
Dec 31/2024 $                                                                          30,000 $                                                          36,309 $                                            6,309 $                                41,314 $                       1,458,686
Jun 30/2025 $                                                                          30,000 $                                                          36,467 $                                            6,467 $                                34,847 $                       1,465,153
Dec 31/2025 $                                                                          30,000 $                                                          36,629 $                                            6,629 $                                28,218 $                       1,471,782
Jun 30/2026 $                                                                          30,000 $                                                          36,795 $                                            6,795 $                                21,424 $                       1,478,576
Dec 31/2026 $                                                                          30,000 $                                                          36,964 $                                            6,964 $                                14,459 $                       1,485,541
Jun 30/2027 $                                                                          30,000 $                                                          37,139 $                                            7,139 $                                  7,321 $                       1,492,679
Dec 31/2027 $                                                                          30,000 $                                                          37,321 $                                            7,321 $                                        -   $                       1,500,000
Total $                                                                        600,000 $                                                        716,921 $                                        116,921