Ohison Company is preparing an Excel spreadsheet for its 20-year, 4.5%, $500,000 bonds payable. The bonds were issued on January 1 to yield 5% Lopez Plastics Company (LPC) issued callable bonds on January 1, 2024. LPC's accountant has projected the following amortization schedule annually. Interest is paid semi-annually. A portion of the spreadsheet appears as follows: issuance until m Cash Effective Decrease in Outstanding Date interest interest balance Stated rate: 0.045 1/1/2024 207, 020 Effective rate: 0.05 500, 000 6/30/2024 $ 7,000 12/31/2024 7090 6,211 $ 789 206 , 230 Face amount : 6, 187 813 205 417 Term to maturity in years: 20 6/30/2025 7,000 6,163 837 204 , 580 5 6, 13 863 203 , 717 6 p Interest Change in outstanding 12/31/2025 7,000 Balance 6/30/2026 7,000 6,212 8 88 202 , 829 Period Cash Payment Expense Discount 7 12/31/2026 6,085 201 , 913 200 , 971 8 6/30/2027 1,000 6,057 12/31/2027 7,000 6, 029 971 200 , 000 What is the annual stated interest rate on the bonds? What formula should Ohlson use in cell C8 to calculate interest expense for the first interest payment? Multiple Choice Multiple Choice O -E7'83 O 3.5% O -E7.C2/2 6% -BB - DB 7% -E7'83/2 O None of the answer choices is correct. On June 30, 2024, Moran Corporation issued $10.0 million of its 6% bonds for $8.9 million. The bonds were priced to yield 8%. The bonds are dated June 30, 2024. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond A bond issue with a face amount of $800,000 bears interest at the rate of 6%. The current market rate of interest is 8%. These bonds will sell at a price discount be reduced for the six months ended December 31, 2024? that is : Multiple Choice Multiple Choice $65,000 O Less than $800,000. O $56,000 Equal to $800,000. $62,500 . More than $800,000. $54,500 The answer cannot be determined from the information provided. Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2024. The bonds have a 10-year term and pay interest semiannually. This is the Discount-Mart issued ten t sand $1,000 bonds on January 1, 2024. The bonds have a 10-year term and pay interest semiannually. This is the partial partial bond amortization schedule for the bonds. bond amortization schedule for the bonds. Effective Decrease in Outstanding Effective Decrease in Outstanding Payment Cash Interest Balance Balance Payment Cash Interest Balance 11,487, 747 8 . 640. 967 8 , 686 , 606 $ 400, 000 $ 344, 632 55, 368 11, 432, 379 $ 300, 000 $ 345, 639 $ 45, 639 347 , 464 8, 734, 070 W N X 400,000 342 , 971 57 , 029 11, 375, 350 2 47 ,464 341, 261 58 , 739 11, 316, 611 W N 200,000 349 , 363 49 ,363 8, 783,433 400,000 400,000 300, 000 What is the interest expense on the bonds for the year 2025? What is the effective annual rate of interest on the bonds? Multiple Choice Multiple Choice 4% O $680,759 6% O $800,000 3% O $342,971 8% O $119,241
