On January 1, 2004, Holstein Enterprises issued bonds. Its accounting department prepared the amortization table below. Required

Question:

On January 1, 2004, Holstein Enterprises issued bonds. Its accounting department prepared the amortization table below.

Required
A. What was the total face value of the bonds issued?
B. At what price were the bonds sold?
C. What is the stated rate, or nominal rate, of interest for these bonds?
D. What is the real, or effective, rate of interest for these bonds?
E. What amount will appear on the year 3 income statement related to these bonds?
F. What amount will appear on the year 4 balance sheet related to these bonds?
G. Explain the interrelationship among the three items reported in the last row of the table (the row labeledTotal).

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...