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Exercise 14-14B Effective Interest: Amortization of bond premium LO P6 Quatro Co. issues bonds dated January 1, 2015, with a par value of $810,000. The
Exercise 14-14B Effective Interest: Amortization of bond premium LO P6 Quatro Co. issues bonds dated January 1, 2015, with a par value of $810,000. The bonds' annual contract rate is 12%, 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 10%, and the bonds are sold for $851,101. 1. What is the amount of the premium on these bonds at issuance? Answer is complete and correct 41,101 Premium 2. How much total bond interest expense will be recognized over the life of these bonds? Answer is complete and correct Total Bond Interest Expense Over the Life of the Bonds: Amount repaid: 6 payments of 48,600 291,600 810,000 Par value at maturity Total repaid 1,101,600 851,101 Less amount borrowed S 250,499 Total bond interest expense
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