Explore BrainMass

Explore BrainMass

    Effective-interest, straight-line bond amortization

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    On jan 1st 2006, Plotu Co. acquires $200,000 of Funtoy Products, Inc., 9% bonds at a price of $185,589. The interest is payable each dec 31, and the bonds mature dec 31, 2008. The investment will provide Funtoy a 12% yield. The bonds are classified as held-to-maturity.

    a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method
    b) Prepare a 3-year schedule of interest revenue and bond discount, applying the effective-interest-method

    © BrainMass Inc. brainmass.com March 4, 2021, 8:07 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/effective-interest-straight-line-bond-amortization-146588

    Solution Summary

    Prepares schedule of interest revenue and bond discount amortization using i) effective-interest and ii) straight-line bond amortization methods.

    $2.49

    ADVERTISEMENT