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Hello, I'm having trouble understanding how to do this problem. Will you please help? Thank you! On March 31, 2011 Louis Company issued $20,000,000 face
Hello, I'm having trouble understanding how to do this problem. Will you please help? Thank you! On March 31, 2011 Louis Company issued $20,000,000 face amount of 7%, 5-year bonds payable, with interest payable each June 30 and December 31. The company received cash of $20,200,000, including the accrued interest from December 31, 2010. Louis uses the straight-line method of amortizing any discount or premium over the remaining life of the bonds-57 months. (a) What was the amount of accrued interest received by Louis on March 31, 2011 when the bonds were issued? (Do not assume the bonds were issued at par.) $_______________ (b) What was the amount of discount or premium on the bonds at issuance date? (Indicate discount or premium.) $_______________ (c) What amount of cash is paid to bondholders for interest during year 2011? $_______________ (d) What is Louis' total interest expense for year 2011 related to this bond issue? $_______________ (e) What is the carrying value of this bond issue as of December 31, year 2011? $_______________
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