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How do they get $95,027 for the carrying amount in year 1 Extinguishment of Debt Illustration: Three year 8% bonds of $100,000 issued on Jan.
How do they get $95,027 for the carrying amount in year 1
Extinguishment of Debt Illustration: Three year 8% bonds of $100,000 issued on Jan. 1, 2020, are recalled at 105 on Dec. 31, 2021. Unamortized bond issue costs are $10,000 and expenses of recall are $2,000. Market rate on issue date was 10%. 8% Cash Paid 10% Interest Discount se Amortized Date 01/01/2020 12/31/2020 12/31/2021 12/31/2022 $ 8,000 8,000 8,000 $ 9,503 9,653 9,817 $ 1,503 1,653 1,817 Carrying Amount $ 95,027 96,530 98,183 100,000Step by Step Solution
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