Chapter 1 Problem 12-12
Year Bond outstanding Fraction Discount amortization
2008 4,000,000 4/10 120,000
2009 3,000,000 3/10 90,000
2010 2,000,000 2/10 60,000
2011 1,000,000 1/10 30,000
10,000,000 300,000
2010
Dec. 31 Cash 240,000
Interest income 240,000
31 Held to maturity securities 60,000
Interest income 60,000
31 Cash 1,000,000
Held to maturity securities 1,000,000
2011
Dec. 31 Cash 120,000
Interest income 120,000
31 Held to maturity securities 30,000
Interest income 30,000
31 Cash 1,000,000
Held to maturity securities 1,000,000
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