QS 14-6 Straight-Line: Bond computations LO P2 Enviro Company issues 8%, 10-year bonds with a par value of $220,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 12. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 87 %, what are the issuer's cash proceeds from issuance of these bonds? Cash proceeds $ 192,500 2. What total amount of bond interest expense will be recognized over the life of these bonds? $ Total Bond Interest Expense Over Life of Bonds: Amount repaid 20 payments of $ 8,800 Par value at maturity Total repayments Less amount borrowed (from part 1) Total bond interest expense 176,000 220,000 396,000 192,500 203,500 $ 192,500 2. What total amount of bond interest expense will be recognized over the life of these bonds? $ Total Bond Interest Expense Over Life of Bonds: Amount repaid: 20 payments of $ 8,800 Par value at maturity Total repayments Less amount borrowed (from part 1) Total bond interest expense 176,000 220,000 396,000 192,500 203,500 $ 3. What is the amount of bond interest expense recorded on the first interest payment date? Bond interest expense