*PROBLEM 10-6A

(a)
July 1

(b)

2011
Cash...........................................................
Bonds Payable ..............................

2,271,813

ATWATER CORPORATION
Bond Premium Amortization
Effective-Interest MethodSemiannual Interest Payments
10% Bonds Issued at 8%
(A)
Semiannual
Interest
Interest
to Be
Periods
Paid
Issue date
1
$100,000
2
100,000
3
100,000

(c) Dec. 31

(d)
July 1

(e) Dec. 31

10-40

2,271,813

(B)

(D)

$90,873
90,507
90,128

Bond
Carrying
Value
$2,271,813
2,262,686
2,253,193
2,243,321

(C)
Premium
AmorInterest tization
Expense (A) (B)
$9,127
9,493
9,872

Bond Interest Expense

($2,271,813 X 4%)..............................
Bonds Payable .......................................
Bond Interest Payable
($2,000,000 X 5%) .....................
2012
Bond Interest Expense
[($2,271,813 $9,127) X 4%]..........
Bonds Payable .......................................
Cash ..................................................
Bond Interest Expense
[($2,262,686 $9,493) X 4%]..........
Bonds Payable .......................................
Bond Interest Payable.................

Copyright 2011 John Wiley & Sons, Inc.

90,873
9,127
100,000

90,507
9,493
100,000

90,128
9,872

Weygandt, IFRS, 1/e, Solutions Manual

100,000

(For Instructor Use Only)