On January 1, 2022, the Lynn Co. issued $15,000,000 in 8 year, 8% bonds with interest paid annually every January 1 (first payment January 1, 2022. Because the market rate of interest was 7% for bonds of Lynn's quality on January 1, 2022, the bonds sold for $15,895,695. Ignore transactions costs. The company has a December 31 year-end. 

Present value parameters are: 

n = 8; i = 7%; 

payment = $1,200,000; 

future value= $15,000,000; 

present value =$15,895,695.

Required

What is the carrying value of the bonds on December 31, 2022 balance sheet?

How much interest expense should Lynn report for 2023?

Answer rating: 100% (QA)

To calculate the carrying value of the bonds on the December 31 2022 balance sheet we need to consid... View the full answer