Question
Discount-Mart issues $17 million in bonds on January 1, 2024. The bonds have a nine-year bond amortization schedule for the bonds: term and pay interest
Discount-Mart issues $17 million in bonds on January 1, 2024. The bonds have a nine-year bond amortization schedule for the bonds:
term and pay interest semiannually on June 30 and December 31 cach year. Below is a partial
Date
Cash Paid
01/01/2024
06/30/2024
12/31/2024
06/30/2025
12/31/2025
Interest
Expense
Increase in
Carrying Value
$680,000
680,000
680,000
680,000
$750,639
754,170
757,879
761,773
$70,639
74,170
77,879
81,773
Carrying
Value
$15,012,770
15,083,409
15,157,579
15,235,458
15,317,231
What is the stated annual rate of interest on the bonds? Do not round your intermediate calculations.)
A) 4%
B) 10%
C) 8%
D\ 9%
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Accounting concepts and applications
Authors: Albrecht Stice, Stice Swain
11th Edition
978-0538750196, 538745487, 538750197, 978-0538745482
