On January 1, 2018, Amazon issued $750,000 of an 8% bond due in four years with interest

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On January 1, 2018, Amazon issued $750,000 of an 8% bond due in four years with interest payable annually at year-end. The current market rate for the interest of bonds of similar risk is 3.63%. The bond sold at 116.

a) What is the issue price?

b) What does the issue price mean?

c) Was this bond sold at a discount or premium? How much did the bond sell for?

d) Using the effective interest method, what will the payment schedule look like?

e) What will the liabilities section of the balance sheet look like for 1/1/2018, 1/1/2019, and 1/1/2022?

Related Book For answer-question

Financial Accounting

ISBN: 978-1259307959

4th edition

Authors: David Spiceland, Wayne Thomas, Don Herrmann

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Posted Date: Dec 21, 2022 02:08 AM

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On January 1, 2018, Amazon issued $750,000 of an 8% bond due in four years with interest

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a The issue price of a bond is the price at which the bond is sold to the public b The issue price ... View the full answer

Financial Accounting

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