Grider Industries, Inc issued $6,000,000 of 8 debentures on November 1, 2010 The bonds pay interest semiannually on May 1 and November 1 The maturity date on these bonds is November 1, 2020 The firm uses the effective interest method of amortizing discounts and premiums The bonds were sold to yield...

The Answer is in the image, click to view ...

Grider Industries, Inc. issued $6,000,000 of 8% debentures on November 1, 2010. The bonds pay interest semiannually

Question:

Grider Industries, Inc. issued $6,000,000 of 8% on November 1, 2010. The bonds pay interest semiannually on May 1 and November 1. The date on these bonds is November 1, 2020. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective-interest rate of 10%.
a. Calculate the present value of the
b. Calculate the total dollar amount of discount or premium amortization during the first year (5/1/10 through 4/30/11) these bonds were outstanding. (Show computations and round to the nearest dollar.)

Debentures
Debenture DefinitionDebentures are corporate loan instruments secured against the promise by the issuer to pay interest and principal. The holder of the debenture is promised to be paid a periodic interest and principal at the term. Companies who... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...