(Learning Objectives 2, 5: Analyzing a company’s long-term debt; reporting longterm debt on the balance sheet (effective-interest method)) The notes to the Helping Charities’

fi nancial statements reported the following data on December 31, Year 1 (end of the fi scal year)

Helping Charities amortizes bonds by the effective-interest method and pays all interest amounts at December 31.
❙ Requirements 1. Answer the following questions about Helping Charities’ long-term liabilities:

a. What is the maturity value of the 7% bonds?

b. What are Helping Charities’ annual cash interest payments on the 7% bonds?

c. What is the carrying amount of the 7% bonds at December 31, year 1?
2. Prepare an amortization table through December 31, Year 4, for the 7% bonds. The market interest rate on the bonds was 8%. (Round all amounts to the nearest dollar.)
How much is Helping Charities’ interest expense on the 7% bonds for the year ended December 31, Year 4?
3. Show how Helping Charities would report the 7% bonds payable and the 6% notes payable at December 31, Year 4.