Clark Company sells 8% bonds having a maturity value of $5,000,000 for $5,421,236. The bonds are dated January 1, 2014, and mature January 1, 2019. Interest is payable annually on January 1.
Required: Set up a schedule of interest expense and premium amortization under the effective-interest method if the effective interest rate is 12%
Year
Cash Paid
Interest Expense
Premium Amortized
Carrying Amount of Bonds
Jan. 1, 2014
5421236
Dec. 31, 2014
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Dec. 31, 2015
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Dec. 31, 2016
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Dec. 31, 2017
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Dec. 31, 2018
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