Huskey Mining Corporation issued bonds with a par value of $105,000 on January 1, 2020. The annual

Question:

Huskey Mining Corporation issued bonds with a par value of $105,000 on January 1, 2020. The annual contract rate on the bonds is 9%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 11%, and the bonds were sold for $99,755.

a. What is the amount of the original discount on these bonds?

b. How much total bond interest expense will be recognized over the life of these bonds?

c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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