On January 1, 2014, Carrolton Condo Association issued bonds with a face value of $250,000, a stated

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On January 1, 2014, Carrolton Condo Association issued bonds with a face value of $250,000, a stated rate of interest of 8 percent, and a 10-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 10 percent at the time the bonds were issued. The bonds sold for $219,277. Carrolton used the effective interest rate method to amortize bond discount.

Required
a. Determine the amount of the discount on the day of issue.
b. Determine the amount of interest expense recognized on December 31, 2014.
c. Determine the carrying value of the bond liability on December 31, 2014.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Survey of Accounting

ISBN: 978-0077862374

4th edition

Authors: Thomas Edmonds, Christopher, Philip Olds, Frances McNair, Bor

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