Question
ABC Company issues $590,000 of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond
ABC Company issues $590,000 of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: Date 01/01/2021 06/30/2021 12/31/2021 Cash Paid Interest Expense Change in Carrying Value Carrying Value $648,389 $26,550 $25,936 $-614 647,775 26,550 25,911 -639 647,136 Required: What is the original issue price of the bonds? $648,389 $590,000 $647,775 $616,550 What is the stated interest rate? 9.0% 8.0% 4.0% 4.5% What is the market interest rate? 9.0% 8.0% 4.0% 4.5% What is the interest expense reported on June 30, 2022? $25,885 $26,550 $25,859 $25,911 What is the cash flow from operating activities from this bond in 2021? O $53,100 outflow $51,847 outflow $648,389 inflow $595,289 inflow
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