Cougar Corp. sold 2-year, 6%, $300,000, bonds on January 1, 2020 for $270,000. Interest is paid semi-annually on June 30 and December 31. 2 points What is the journal entry to record the issuance of the Bond on 1/1/2020? 8 points: Complete the amortization schedule below. Period ended Cash Paid Interest expense amortization Carrying amount 06/30/2020 12/31/2020 06/30/2021 12/31/2021

Dr Cash                                                                              $270,000

Dr discount on bonds payable($300,000-$270,000)   $30,000

Cr bonds payable                                                                             $300,000

Explanation:

First and foremost we need to determine the yield to maturity on this bond using rate formula in excel:

=rate(nper,pmt,-pv,fv)

nper is the number of interest payments the bond would make,which is 2

years multiplied 2 since interest is paid twice i.e nper is 4

pmt is the semiannual interest payable =$300,000*6%*6/12=$9000

pv is the current price of $270,000

fv is the face value of $300,000

=rate(4,9000,-270000,300000)=5.88%

5.88%  is the semiannual rate

5.88%*2=11.76% is the annual yield

The annual yield is made use of in the attached amortization schedule.

hardwork and determination

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