On December 31, 2011, Philips Corporation issued bonds with a total face amount of $1,000,000 and a

Question:

On December 31, 2011, Philips issued bonds with a total face amount of $1,000,000 and a stated rate of 7 percent.

Required:
1. Calculate the interest expense for 2012 if the bonds were sold at par.
2. Calculate the interest expense for 2012 if the bonds were sold at a premium and the straight-line premium amortization for 2012 is $8,000.
3. Calculate the interest expense for 2012 if the bonds were sold at a discount and the straight-line discount amortization for 2012 is $6,000.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...