Answers
a) $495,281 will be amortized as an expense on 30-06-2020
Journal entry for expense on 30-06-2020
Interest Expense ....dr $495,281
To 5.8% Bond. $495,281

b).
Journal entry for expense on 31-12-2020
Interest Expense ....dr $495,437
To 5.8% Bond. $495,437
AS PER QUESTION MATURITY VALUE AMOUNT RECEIVED INTEREST RATE EFFECTIVE INTEREST RATE (EIR) 1,69,00,000.00 1,65,09,360.00 5.8% P.A. 6% PA AMORTISATION TABLE DATE PARTICULARS 01-01-2020 BONDS ISSUED 30-06-2020 INTEREST PAYMENT REPAYMENT/INTEREST PRINCIPAL AMOUNT EIR @6% PAYMENT 5.8% NET BALANCE 1,65,09,360.00 1,65,09,360.00 1,65,09,360.00 4,95,281.00 4,90,100.00 1,65,14,541.00 (16509360*6/100*1/2) 1,65,14,541.00 4,95,437.00 4,90,100.00 1,65,19,878.00 (16514541*6/100*1/2) 31-12-2020 INTEREST PAYMENT Journal Entry Date Debit Credit 4,95,281.00 4,95,281.00 4,90,100.00 4,90,100.00 Particulars 30-06-2020 Interest Expense....Dr To 5.8 % Bond (Being Interest Expense Booked) 30-06-2020 5.8 % Bond .Dr To Bank (Being Contractual Payment Made) 31-12-2020 Interest Expense ...Dr To 5.8 % Bond (Being Interest Expense Booked 31-12-2020 5.8 % Bond ....Dr To Bank (Being Contractual Payment Made) 4,95,437.00 4,95,437.00 4,90,100.00 4,90,100.00
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