1))

Stanford issues bonds dated January 1, 2015, with a par value of $248,000. The bonds annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $229,115.

1. What is the amount of the discount on these bonds at issuance?

2. How much total bond interest expense will be recognized over the life of these bonds?

3. Prepare an Amortization table using the effective interest method to amortize the discount for these bonds. (Enter all amounts positive values. Round all amounts to the nearest whole dollar.)

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Discount Amortization	Unamortized Discount	Carrying Value
01/01/2015
06/30/2015
12/31/2015
06/30/2016
12/31/2016
06/30/2017
12/31/2017
Total

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2))

Quatro Co. issues bonds dated January 1, 2015, with a par value of $750,000. The bonds annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $769,646.

1. What is the amount of the discount on these bonds at issuance?

2. How much total bond interest expense will be recognized over the life of these bonds?

3. Prepare an Amortization table using the effective interest method to amortize the discount for these bonds. (Enter all amounts positive values. Round all amounts to the nearest whole dollar.)

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Discount Amortization	Unamortized Discount	Carrying Value
01/01/2015
06/30/2015
12/31/2015
06/30/2016
12/31/2016
06/30/2017
12/31/2017
Total