Question: The company issues 1 0 % , 5 - year bonds with a total face amount of $ 1 0 0 , 0 0 0

The company issues 10%,5-year bonds with a total face amount of $100,000. The market interest rate for bonds of
similar risk and maturity is 10.2%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY
COMPLETE THE PROBLEM SET (input your answers after youve completed the entire problem).
4. $___________(rounded to nearest dollar). What is the issue price of the bond?
5. $___________(rounded to nearest dollar). When the company records the first interest payment, how much will
the company record for interest expense?
6. $___________(rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest
payment?
7. $___________(rounded to nearest dollar). When the company records the second interest payment, how much will
the company record for interest expense?

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