Question
I have the answers. but i do not know how to show the work to get to the solution. please help. On January 1, 2011,
I have the answers. but i do not know how to show the work to get to the solution. please help.
On January 1, 2011, Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually. The following present value factors have been provided to answer the subsequent questions:
Time Period | Interest | PV of $ | PV of Annuity |
10 | 10% | 0.386 | 6.145 |
10 | 8% | 0.463 | 6.710 |
10 | 12% | 0.322 | 5.650 |
If Jason issued the bonds at a price of 106.5, how much would the premium amortizationbe on December 31, 2011 under the straight-line method?
$32,500
How much cash interest would be paid by Jason on December 31, 2011?
$500,000
If Jason issued the bonds at price of 106.5, the amount of interest expense on December31, 2011 under the straight-line amortization method equals
$467,500
If Jason issued the bonds at a price of 106.5, what is the book value of Jasons bonds onDecember 31, 2011 after the interest payment assuming the straight-line method is usd?
$5,292,500
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