Nicole B.

Manzo AE 13 Intermediate Accounting

3
BS Accounting Information System

1. Problem 6-13 (Marsh Company)

Date Interest Paid Interest Expense Discount Carrying

Amount
Amortization
Jan. 01, 2021 5,316,000
June 30, 2021 300,000 318,960 18,960 5,334,960
Dec. 31, 2021 300,000 320,098 20,098 5,355,058

6,000,000 x 5% = 300,000
5,316,000 x 6% = 318,960
318,960 – 300,000 = 18,960
5,316,000 + 18,960 = 5,334,960

Answer: B 318,960

2. Problem 6-14 (Tara Company)

Schedule of Amortization

Date Interest Paid Interest Expense Discount Carrying

Amount
Amortization
July 01, 2021 3,504,000
Dec. 31, 2021 160,000 175,200 15,200 3,519,200
June 30, 2022 160,000 175,960 15,960 3,535,160

4,000 x 1,000 = 4,000,000

4,000,000 x 4% = 160,000
3,504,000 x 5% = 175,200
175,200 – 160,000 = 15,200
3,504,000 + 15,200 = 3,519,200

Answer: D 15,200
3. Problem 6-15 (Moon Company)

Date Interest Paid Interest Expense Discount Carrying

Amount
Amortization
Jan. 01, 2021 3,987,000
June 30, 2021 225,000 239,220 14,200 4,001,200
Dec. 31, 2021 225,000 240,072 15,072 4,016,272

4,500,000 x 5% = 225,000
3,987,000 x 6% = 239,200
239,200 – 225,000 = 14,200
3,987,000 + 14,200 = 4,001,200

Answer: B 239,220