A partial bond amortization schedule for $2-million, 5-year bonds is presented below:

(a) Fill in the missing words or amounts for items [1] through [6].
(b) What is the bonds' face value?
(c) What is the bonds' contractual interest rate? The market interest rate?
(d) Explain why interest expense differs from the amount of interest paid.

Transcribed Image Text:

Semi-Annual Interest 12] Bond Amortized Cost $1,912,479 1,920,291 Interest Interest Period21 Amortization Issue Date 1 (Apr. 30) 2 (Oct. 31 $40,000 40,000 14] $48,007 $7,812