Calculation of straight line amortization

Trial Bal Trial Bal Amortized Unamortized Carrying

Date Account Debit (Credit) Acount Beg ADJ Ending Date amount Discount Value
Recorded journal entries and post to the 1/1 Cash 198,484 Cash 720,000 184,084 904,084 1/1 41,516 198,484
trail balance Bonds Payable (240,000) Accounts receivable 250,000 250,000 6/30 1,384 40,132 199,868
1/1 Issued bonds which pay Discount on Bonds Payab 41,516 Accounts Payable (20,000) (20,000) 12/31 1,384 38,748 201,252
interest semiannually Bonds Payable 0 (240,000) (240,000)
Number of years 15 6/30 Bond interest expense 8,584 Discount on Bonds Paya 0 38,748 38,748
Face value 240,000 Cash (7,200) Common Dividend paya 0 0
Issue price 198,484 Discount on Bonds Payable (1,384) Retained Earnings (250,000) (250,000)
Interest rate on bond 6% Sales (700,000) (700,000)
Market rate 8% 12/31 Bond interest expense 8,584 Cost of goods sold 0 0
6/30 Record bond interest and Cash (7,200) Bond interest expense 0 17,168 17,168
straight line amortization Discount on Bonds Payable (1,384) Wages Expense 0 0
of interest 0 0 (0)
12/31 Record bond interest and Net income (700,000) 17,168 (682,832)
straight line amortization
of interest

Calculation of straight line amortization

Trial Bal Trial Bal Amortized Unamortized Carrying
Date Account Debit (Credit) Acount Beg ADJ Ending Date amount Premium Value
Recorded journal entries and post to the 1/1 Cash 270,000 Cash 720,000 250,800 970,800 1/1 30,000 270,000
trail balance Bonds Payable (240,000) Accounts receivable 250,000 250,000 6/30 1,000 29,000 269,000
1/1 Issued bonds which pay Premium on Bonds Payable (30,000) Accounts Payable (20,000) (20,000) 12/31 1,000 28,000 268,000
interest semiannually Bonds Payable 0 (240,000) (240,000)
Number of years 15 6/30 Bond interest expense 8,600 Premium on Bonds Paya 0 (28,000) (28,000)
Face value 240,000 Cash (9,600) Common Dividend paya 0 0
Issue price 270,000 Premium on Bonds Payab 1,000 Retained Earnings (250,000) (250,000)
Interest rate on bond 8% Sales (700,000) (700,000)
Market rate 5% 12/31 Bond interest expense 8,600 Cost of goods sold 0 0
6/30 Record bond interest and Cash (9,600) Bond interest expense 0 17,200 17,200
straight line amortization Premium on Bonds Payab 1,000 Wages Expense 0 0
of interest 0 0 0
12/31 Record bond interest and Net income (700,000) 17,200 (682,800)
straight line amortization
of interest
 Calculation of straight line amortization
Trial Bal Trial Bal Amortized Unamortized Carrying
Date Account Debit (Credit) Acount Beg ADJ Ending Date amount Discount Value
Recorded journal entries and post to the Cash 720,000 720,000
trail balance Accounts receivable 250,000 250,000
1/1 Issued bonds which pay Accounts Payable (20,000) (20,000)
interest semiannually Bonds Payable 0 0
Number of years 15 Discount on Bonds Paya 0 0
Face value 240,000 Common Dividend paya 0 0
Issue price 198,484 Retained Earnings (250,000) (250,000)
Interest rate on bond 6% Sales (700,000) (700,000)
Market rate 8% Cost of goods sold 0 0
6/30 Record bond interest and Bond interest expense 0 0
straight line amortization Wages Expense 0 0
of interest 0 0 0
12/31 Record bond interest and Net income (700,000) 0 (700,000)
straight line amortization
of interest

Calculation of straight line amortization

Trial Bal Trial Bal Amortized Unamortized Carrying
Date Account Debit (Credit) Acount Beg ADJ Ending Date amount Premium Value
Recorded journal entries and post to the Cash 720,000 720,000
trail balance Accounts receivable 250,000 250,000
1/1 Issued bonds which pay Accounts Payable (20,000) (20,000)
interest semiannually Bonds Payable 0 0
Number of years 15 Premium on Bonds Paya 0 0
Face value 240,000 Common Dividend paya 0 0
Issue price 270,000 Retained Earnings (250,000) (250,000)
Interest rate on bond 8% Sales (700,000) (700,000)
Market rate 5% Cost of goods sold 0 0
6/30 Record bond interest and Bond interest expense 0 0
straight line amortization Wages Expense 0 0
of interest 0 0 0
12/31 Record bond interest and Net income (700,000) 0 (700,000)
straight line amortization
of interest