MacBride Enterprises sold $200,000 of bonds on December 31, 2011. A portion of the amortization table appears below.

Required:
1. Indicate the stated annual interest rate on these bonds.
2. Calculate the effective annual interest rate on these bonds (rounded to the nearest 0.1 percent).
3. Determine the interest expense and premium amortization for the interest period ending December 31, 2013.
4. Determine when the bonds willmature.

Transcribed Image Text:

Premium Premium Cash Interest on Bonds on Bonds Payment Expense Payable Payable Carrying Period At issue 6/30/12 12/31/12 6/30/13 12/31/13 (Credit) (Debit) (Debit) Balance Value $9,000 9,000 9,000 $8,465 8,443 8,420 $535 557 580 $6,457 $206,457 5,922 205,922 5,365 205,365 4,784204,785