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Exercise 14-9 On June 30, 2017, Kingbird Company issued $4,700,000 face value of 13%, 20-year bonds at $5,053,579, a yield of 12%. Kingbird uses the
Exercise 14-9
On June 30, 2017, Kingbird Company issued $4,700,000 face value of 13%, 20-year bonds at $5,053,579, a yield of 12%. Kingbird uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
Your answer is partially correct. Try again. Provide the answers to the following questions (1) What amount of interest expense is reported for 2018? (Round answer to O decimal places, e.g. 38,548.) Interest expense reported for 2018s (2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if 606010 the straight-line method of amortization were used? less tha The bond interest expense reported in 2018 will be amortization were used. the amount that would be reported if the straight-line method of (3) Determine the total cost of borrowing over the life of the bond. (Round answer to O decimal places, e.g. 38,548.) Total cost of borrowing over the life of the bond 868421 (4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used? The total bond interest expense for the life of the bond will bethe same asthe total interest expense if the straight-line method of amortization were used. Click if you would like to Show Work for this question: Open Show Work
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