Question
1. Which defines serial bonds? a. Matures on a single date. b. Secured only by the full faith and credit of the issuing corporation. c.
1. Which defines serial bonds?
a. Matures on a single date. b. Secured only by the "full faith and credit" of the issuing corporation. c. Supported by specific assets pledged as collateral by the issuer.
2. Peke company issued a bond on 1/1/2018. Use the following amortization schedule for the bond to get the interest rates.
a. The annual stated interest rate on the bonds is _____.
b. The annual market interest rate on the bonds is ______.
Date | Cash Paid | Interest Expense | Decrease in Carrying Value | Carrying Value |
1/1/2018 |
|
|
| $104,212 |
12/31/2018 | 7,000 | $6,253 | $747 | $103,465 |
12/31/2019 | 7,000 | $6,208 | $792 | $102,673 |
12/31/2020 | 7,000 | $6,160 | $840 | $101,833 |
12/31/2021 | 7,000 | $6,110 | $890 | $100,943 |
12/31/2022 | 7,000 | $6,057 | $943 | $100,000 |
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