On January 1, 2017, Partridge Advertising Company issued $50,000 of six-year, 3% bonds when the market interest rate was 4%
The bonds were issued for $47,356. Partridge uses the effective-interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. Prepare the amortization table for the first four interest payments. (Round your answers to the nearest dollar number.)
Date Cash Paid Interest Expense Discount Amortized Carrying Amount
1/1/17
6/30/17
12/31/17
6/30/18
12/31/18
What will be an ideal response
Date Cash Paid Interest Expense Discount Amortized Carrying Amount
1/1/17 $ 47,356
6/30/17 $ 750 $ 947 $ 197 47,553
12/31/17 750 951 201 47,754
6/30/18 750 955 205 47,959
12/31/18 750 959 209 48,168 .Cash paid each interest payment date = $50,000 x 3% x 6/12 = $750
First interest expense = $47,356 x 4% x 6/12 = $947
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