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10-22A Effective Interest amortozation for a bond premium Exercise 10.22A (Algo) Effective interest amortization for a bond premium LO 10.7 On January 1, Year 1,
10-22A Effective Interest amortozation for a bond premium
Exercise 10.22A (Algo) Effective interest amortization for a bond premium LO 10.7 On January 1, Year 1, Hart Company issued bonds with a face value of $102,000, a stated rate of interest of 9 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 8 percent at the time the bonds were issued. The bonds sold for $106,073. Hart used the effective interest rate method to amortize the bond premium. Note: Round your intermediate colculations and final answers to the nearest whole number. Required: b. What is the carrying value that would appear on the Lear 4 balance sheet? c. What is the interest expense that would appear on the Year 4 income statement? d. What is the amount of cash outfiow for interest that would appear in the operating activities section of the Year 4 statement of cash flows Step by Step Solution
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