On January 1, 2021, Vacation Destinations issues $40 million of bonds that pay interest semiannually on June
Question:
On January 1, 2021, Vacation Destinations issues $40 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
Required:
1. Were the bonds issued at face amount, a discount, or a premium?
2. What is the original issue price of the bonds?
3. What is the face amount of the bonds?
4. What is the stated annual interest rate?
5. What is the market annual interest rate?
6. What is the total cash paid for interest assuming the bonds mature in 10 years?
Transcribed Image Text:
(1) (2) Cash Paid (3) (4) Increase in (5) Carrying Value Interest Date for Interest Expense Carrying Value 1/1/2021 $37,281,935 6/30/2021 $1,400,000 $1,491,277 $91,277 37,373,212 12/31/2021 1,400,000 1,494,928 94,928 37,468,140
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Given Issue Date January 1 2021 Face Value 40 million or 40000000 Frequency of interest payment 2 times per year semiannually Bond Amortization Schedu...View the full answer
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Related Book For
Financial Accounting
ISBN: 978-1259914898
5th edition
Authors: David Spiceland, Wayne M. Thomas, Don Herrmann
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