Question: Alberta Industries Ltd issued 10 10 year bonds with a par

Alberta Industries Ltd. issued 10%, 10-year bonds with a par value of $200,000 and semi-annual interest payments. On the issue date, the annual market rate of interest for the bonds was 12%, and the selling price was $177,059. The effective interest method is used to allocate the interest.
a. What is the total amount of bond interest expense that will be recognized over the life of the bonds?
b. What is the total bond interest expense recorded on the first interest payment date?

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  • CreatedJanuary 08, 2015
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