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17
1) What is the Total Bond Interest Exp for the following bond.
2) What is the JE for its Semiannual Interest Exp?
Face Value: 1,000,000
Issue Price: 1,081,145
Stated Interest: 10%
Market Interest: 8%
2) What is the JE for its Semiannual Interest Exp?
Face Value: 1,000,000
Issue Price: 1,081,145
Stated Interest: 10%
Market Interest: 8%
1)
1,000,000 + 500,000 (1,000,000 x 10% x 5) = 1,500,000
1,500,000 - 1,081,145 = 418,855
2)
Bond Interest Expense 41,885
Premium on Bonds Payable 8,115
Cash 50,000
Premium on Bonds Payable / 10 = 8,115
1,000,000 + 500,000 (1,000,000 x 10% x 5) = 1,500,000
1,500,000 - 1,081,145 = 418,855
2)
Bond Interest Expense 41,885
Premium on Bonds Payable 8,115
Cash 50,000
Premium on Bonds Payable / 10 = 8,115
Flashcard info:
Author: savhighsmith
Main topic: Accounting
Topic: General
School / Univ.: UGA
City: Athens
Published: 01.05.2010