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On April 30, year 2, Karlin Company issued $6,000,000 face amount of 10%, 10-year bonds payable, with interest payable each June 30 and December 31.
On April 30, year 2, Karlin Company issued $6,000,000 face amount of 10%, 10-year bonds payable, with interest payable each June 30 and December 31. The company received cash of $6,084,000, including the accrued interest from December 31, year 1. Karlin uses the straight-line method of amortizing any discount or premium over the remaining life of the bonds 116 months. a What was the amount of accrued interest received by Karlin on April 30, year 2, 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 2? $ d What is Karlins total interest expense for year 2 related to this bond issue? $ e What is the carrying value of this bond issue as of December 31, year 2
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