Question

Webb Company has outstanding a 7% annual, 10-year, $100,000 face value bond that it had issued several years ago. It originally sold the bond to yield 6% annual interest. Webb uses the effective interest rate method to amortize the bond premium. On June 30, 2014, the outstanding bond’s carrying amount was $105,000.

Required:
What amount of unamortized premium on the bond should Webb report in its June 30, 2015, balance sheet?



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  • CreatedSeptember 10, 2014
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