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Hondor Corporation issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1, 2012. The stated

Hondor Corporation issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1, 2012. The stated interest rate was payable at the end of each year. The bonds mature at the end of four years. The following schedule has been completed (amounts in thousands):

1) complete the table beloww

Date Cash Interest Amortization Balance
January 1, 2012 $ 6,101
End of year 2012 $ 450 $ 427 $ 23 6,078
End of year 2013 450 426 24 6,054
End of year 2014 450 ? ? ?
End of year 2015 450 ? 28 6,000

2) What was the maturity amount (face value) of the bonds?

3) How much cash was received at date of issuance (sale) of the bonds?

4) Was there a premium or a discount? If so, which and how much was it?

5) How much cash is paid for interest each period and will be paid in total for the full life of the bond issue?

6)What is the stated interest rate? TIP: The stated interest rate can be calculated by comparing the cash payment to the face value of the bond.

7) What is the market interest rate?

8) What amount of interest expense should be reported on the income statement for 2012, 2013, 2014, 2015

9) How would the bonds be classified at end of 2012 and 2013.

10) At what net amount would they be reported. make a partial balance sheet

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