Exercise 10-18B Effective Interest: Amortization of bond discount LO P5 Stanford issues bonds dated January 1, 2019, with a par value of $250,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $231,570. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the amount of the discount on these bonds at issuance? Discount $ 18,430 - Required 1 Required 2 > Exercise 10-18B Effective Interest: Amortization of bond discount LO P5 Stanford issues bonds dated January 1, 2019, with a par value of $250,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $231,570. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: 6 payments of $ 11,250 $ Par value at maturity Total repaid Less amount borrowed Total bond interest expense $ 67,500 250,000 317,500 231,570 85,930 Required 1 Required 3 > Exercise 10-18B Effective Interest: Amortization of bond discount LO P5 Stanford issues bonds dated January 1, 2019, with a par value of $250,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $231,570. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an effective interest amortization table for these bonds. (Round all amounts to the nearest whole dollar.) Semiannual Interest Period-End Cash Interest Bond Interest Paid Expense Discount Amortization Unamortized Discount Carrying Value $ 18,430 $ 231,570 $ $ 13,894 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020 11,250 11,250 11,250 11,250 11,250 11,250 67,500 06/30/2021 12/31/2021 Total 11,250 85,930 $ $ $ 18,430 Required 2 Required 3
