Stanford issues bonds dated January 1, 2017, with a par value of$241,000. The bondsâ annual contract rate is 8%, and interest ispaid semiannually on June 30 and December 31. The bonds mature inthree years. The annual market rate at the date of issuance is 10%,and the bonds are sold for $228,764.
1. What is the amount of the discount on thesebonds at issuance?
2. How much total bond interest expense will berecognized over the life of these bonds?
3. Prepare an amortization table using theeffective interest method to amortize the discount for thesebonds.
Stanford issues bonds dated January 1, 2017, with a par value of$241,000. The bondsâ annual contract rate is 8%, and interest ispaid semiannually on June 30 and December 31. The bonds mature inthree years. The annual market rate at the date of issuance is 10%,and the bonds are sold for $228,764.
1. What is the amount of the discount on thesebonds at issuance?
2. How much total bond interest expense will berecognized over the life of these bonds?
3. Prepare an amortization table using theeffective interest method to amortize the discount for thesebonds.
Related questions
Quatro Co. issues bonds dated January 1, 2015, with a par valueof $730,000. The bondsâ annual contract rate is 12%, and interestis paid semiannually on June 30 and December 31. The bonds maturein three years. The annual market rate at the date of issuance is10%, and the bonds are sold for $767,042. |
| 1. | What is the amount of the premium on these bonds atissuance? 2.How much total bond interest expense will be recognized overthe life of these bonds? 3.Prepare an amortization table for these bonds; use thestraight-line method to amortize the premium. |
