1.) On June 1, 2006, Janson Bottle Company sold $400,000 in long-term bonds for $351,040. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method.
(a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. Make sure all columns and rows are properly labeled. (Round to the nearest dollar.)
2.) Mega Co. purchased a patent from Connor Co. for $180,000 on July 1, 2004. Expenditures of $51,000 for successful litigation in defense of the patent were paid on July 1, 2007. Mega estimates that the useful life of the patent will be 15 years from the date of acquisition.
(a) Prepare a computation of the carrying value of the patent at December 31, 2007.© BrainMass Inc. brainmass.com June 3, 2020, 10:34 pm ad1c9bdddf
A bond amortization table for Janson Bottle Co is examined.