explain why interest expense is greater than interest paid 581467

Presented below is the partial bond discount amortization schedule for Bilder Corp. Bilder uses the effective interest method of amortization.

Interest

Semiannual

Interest to

Expense to

Discount

Unamortized

Bond Carrying

Interest Periods

Be Paid

Be Recorded

Amortization

Discount

Value

Issue date

$62,311

$937,689

1

$45,000

$46,884

$1,884

60,427

939,573

2

45,000

46,979

1,979

58,448

941,552

Instructions

(a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1.

(b) Explain why interest expense is greater than interest paid.

(c) Explain why interest expense will increase each period.