Question

Required information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Cash Interest Amortization Balance January 1, Year 1 $ 32,566 End of Year 1 $ 1,792 $ 1,661 $ 131 32,435 End of Year 2 ? ? ? 32,297 End of Year 3 ? ? 145 ? End of Year 4 ? 1,640 ? 32,000

Answer 1

Answer:

Find attached complete schedule

Explanation:

Find attached bond amortization schedule.

In the preparing the schedule I divide $1792 first coupon interest by the face value of the bond of $32,000 ,I got 6% semiannual coupon rate

I divided the interest expense of $1661 by the carrying value at the beginning of year one of $32,566,I got 5.10% semiannual yield

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