Answers
| REQUIRED 1 : | |||
| Date | Account titles and explanation | Debit | Credit |
| Jan 1,2017 | Debt investments ( Held-to -Maturity ) | $ 303,589.66 | |
| Cash | $ 303,589.66 | ||
| ( to record purchase of bonds at premium ) | |||
| REQUIRED 2 : | ||||
| Schedule of interest Revenue and bond premium amortization | ||||
| Effective - interest Method | ||||
| Date | Cash received | Interest revenue | Premium Amortized | Carrying amount of bonds |
| 01-01-2017 | $ 303,589.66 | |||
| 01-01-2018 | $ 22,400 {$280,000 *8 %} | $ 18,215.38 {$303,589.66*6%} | $ 4,184.62 {$ 22,400 - $ 18,215.38} | $ 299,405.04 {$303,589.66 - $ 4,184.62} |
| 01-01-2019 | $ 22,400 {$280,000 *8 %} | $ 17,964.30 {$299,405.04*6%} | $ 4,435.70 {$ 22,400 -$ 17,964.30} | $ 294,969.34 {$299,405.04 -$ 4,435.70} |
| 01-01-2020 | $ 22,400 {$280,000 *8 %} | $ 17,698.16 {$ 294,969.34 *6%} | $ 4,701.84 {$22,400 - $ 17,698.16 } | $ 290,267.50 {$294,969.34 -$ 4,701.84} |
| 01-01-2021 | $ 22,400 {$280,000 *8 %} | $ 17,416.05 {$290,267.50 *6 % } | $ 4,983.95 {$22,400 -$ 17,416.05} | $ 285,283.55 {$ 290,267.50 - $ 4,983.95} |
| 01-01-2022 | $ 22,400 {$280,000 *8 %} | $ 17,117.01 {$ 285,283.55* 6% } | $ 5,282.99 {$ 22,400 - $ 17,117.01} | $ 280,000.56 {$ 285,283.55 -$5282.99} |
| REQUIRED 3 : | |||
| Date | Account titles and explanation | Debit | Credit |
| Dec 31,2017 | Cash | $ 22,400 | |
| Debt investments ( Held-to -Maturity ) | $ 4,184.62 | ||
| Interest Revenue | $ 18,215.38 | ||
| (To record interest revenue and amortization at Dec 31,2017) | |||
| REQUIRED 4 : | |||
| Date | Account titles and explanation | Debit | Credit |
| Dec 31,2018 | Cash | $ 22,400 | |
| Debt investments ( Held-to -Maturity ) | $ 4,435.70 | ||
| Interest Revenue | $ 17,964.30 | ||
| (To record interest revenue and amortization at Dec 31,2018) | |||
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