14 - 20 The Straight-Line Method – A Practical Expediency Using the straight-line method of amortizing discounts and premiums, the discount in the ear
{"Image DocumentName": "The Straight-Line Method \u2013 A Practical Expediency", "Image ImageDescription": "Using the straight-line method of amortizing discounts and premiums, the discount in the earlier illustration would be allocated equally to the 6 semiannual periods (3 years):  33,367 \u00f7 6 periods =  5,561 per period. At Each of the Six Interest Dates. Masterwear (Issuer) Interest expense 47,561. Discount on bonds payable 5,561. Cash 42,000. Using the straight-line method, the discount in the earlier illustration would be allocated equally to the 6 semiannual periods (3 years) by dividing the total discount of  33,367 by 6 periods for a semiannual amortization of  5,561 per period. On June 30, 2011, the first interest payment date, Masterwear, the issuer, will debt interest expense of  47,561, credit discount on bonds payable for  5,561 (the amount we just calculated), and credit Cash for  42,000. United, the investor, will debit cash for  42,000, debit Discount on bonds investment for  5,561, and credit interest revenue of  47,561. Both companies will make the same journal entry each interest period. United (Investor) Cash 42,000. Discount on bond investment 5,561. Investment revenue 47,561.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}