Spencer company sells 10% bonds having a maturity value of 3,000,000 for 2,783,724. The bonds are dated Jan 1, 2012 and mature Jan 1, 2017. Interest is payable annually on Jan 1.
Set up a schedule of interest expense and discount amortization under the straight line method.
** Please see the full solution provided in the attached excel spreadsheet **
Journal entries are recorded as follows.
Date Details ...
In this solution, we make a schedule of interest expense and discount amortization under the strait line method for a given case example.