M Stanford issues bonds dated January 1, 2019, with a par value of $255,000. The bonds'...

Transcribed Image Text:

M Stanford issues bonds dated January 1, 2019, with a par value of $255,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $236,201. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an effective interest Semiannual Interest Period-End Cash Interest Paid 06/30/2020 12/31/2020 06/30/2021 12/31/2021 Total Required 3 amortization table for these bonds. (Round all amounts to the nearest whole dollar.) Bond Interest Discount Expense Amortization 01/01/2019 06/30/2019 $ 11,475 S 12/31/2019 11,475 11,475 11,475 11,475 11,475 $ 68,850 $ 14,172 S 14,334 14,505 14,687 14,880 11,475 68,850 2,697 2,859 3,030 3,212 3,405 0 <Required 2 Unamortized Discount Carrying Value $ 236,201 238,898 241,757 Required 3 M Stanford issues bonds dated January 1, 2019, with a par value of $255,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $236,201. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an effective interest Semiannual Interest Period-End Cash Interest Paid 06/30/2020 12/31/2020 06/30/2021 12/31/2021 Total Required 3 amortization table for these bonds. (Round all amounts to the nearest whole dollar.) Bond Interest Discount Expense Amortization 01/01/2019 06/30/2019 $ 11,475 S 12/31/2019 11,475 11,475 11,475 11,475 11,475 $ 68,850 $ 14,172 S 14,334 14,505 14,687 14,880 11,475 68,850 2,697 2,859 3,030 3,212 3,405 0 <Required 2 Unamortized Discount Carrying Value $ 236,201 238,898 241,757 Required 3

Answer rating: 100% (QA)

Req 1 Par value of bonds 255000 Less Issue price of bonds 23... View the full answer