1. On January 1, 2016, the Legion Company sold $220,000 of 6% ten-year bonds. Interest is payable...
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2. On January 1, 2016, Solo Inc. issued 1,900 of its 9% bonds for $1,000 at 99 Interest is paid semi-annually on January 1 and July 1. The bonds mature on January 1, 2026. You only paid $59,000 in bond issuance costs. It only uses straight-line depreciation. What would be the amount of interest expense for the year?
3. On January 1, 2016, an investor paid $302,000 for bonds with a face value of $335,000. The established interest rate is 9%, while the current market interest rate is 11%. Using the effective interest method, how much interest income does the investor recognize in 2016 (assuming annual interest and amortization payments)?
4. On January 31, 2016, B Corp. issued a $500,000 par value, 9% bond for $500,000 in cash. The notes are dated December 31, 2015 and mature on December 31, 2025. Interest will be paid semi-annually on June 30 and December 31. What amount of accrued interest payable should B report on its balance sheet as of September 30, 2016?
5. Auerbach Inc. issued 7% bonds on October 1, 2016. The bonds have a maturity date of September 30, 2026 and a face value of $325 million. The bonds pay interest every March 31 and September 30, beginning March 31, 2017. The effective interest rate established by the market was 9%. How much cash interest does Auerbach pay on March 31, 2017?
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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