Question
Computation of Effective Interest Rate On June 30, 2016, Gaston Corporation sold $860,000 of 11% face value bonds for $904,632.44. On December 31, 2016, Gaston
Computation of Effective Interest Rate
On June 30, 2016, Gaston Corporation sold $860,000 of 11% face value bonds for $904,632.44. On December 31, 2016, Gaston sold $350,000 of this same bond issue for $333,733.79. The bonds were dated January 1, 2016, pay interest semiannually on each December 31 and June 30, and are due December 31, 2023.
Required:
Compute the effective yield rate on each issuance of Gaston's 11% bonds. Click here to access the tables to use with this problem. Round your answer to the nearest percentage.
| June 30, 2016 issuance: | fill in the blank 1% |
| December 31, 2016 issuance: | fill in the blank 2% |
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Intermediate Accounting
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
11th edition
978-0538467087, 9781111781262, 538467088, 1111781265, 978-0324659139
