Culver Company sells 8% bonds having a maturity value of $1,500,000 for $1,386,275. The bonds are...

Culver Company sells 8% bonds having a maturity value of $1,500,000 for $1,386,275. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1.

1.Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.)

The effective-interest rate _______%

2.Set up a schedule of interest expense and discount amortization under the effective-interest method. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 38,548.)


Schedule of Discount Amortization Effective-Interest Method
Year	Interest Payable	Interest Expense	Discount Amortized	Carrying Amount of Bonds
Jan. 1, 2020	$	$	$	$
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2024

Expert Solution

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ekkarill92 answered 2 years ago

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