Brief Exercise 9-15 Interpret a bond amortization schedule (LO9-5)
Presented below is a partial amortization schedule for Premium Pizza.
(1)
(2)
Cash
Paid
(3)
(4)
(5)
for
Interest
Period
Interest Expense
Decrease in
Carrying
Value
Issue date
1
2
$2,450
$2,306
$144
2,450
2,301
149
Carrying
Value
$76,860
76,716
76,567
Required:
1. & 2. Record the bond issue and first interest payment assuming the face amount of bonds payable is $70,000. (If no
entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
No
Transaction
1
1
Cash
Bonds Payable
2
2
Interest Expense
Premium on Bonds Payable
Cash
Answer is not complete.
General Journal
Debit
76,860
Credit
76,567
2,306
144
2,450
3. Interest expense decreases each period because the carrying value of the debt issued at a premium decreases over
time.
True
False