Question
On January 1, 2017, ARC Inc. issued 100 5-year bonds, with a face value of $1,000 each and a coupon rate of 10%, payable semiannually.
On January 1, 2017, ARC Inc. issued 100 5-year bonds, with a face value of $1,000 each and a coupon rate of 10%, payable semiannually. The interest is paid on June 30 and December 31 of each year. The market rate of interest at the time that the bonds were issued was 13%, so that the bonds were sold for $892 each.
1. Interest expense for the January 1June 30 period was $_____ 2. Interest expense for the July1December 31 period was $_____ 3. Book value of Bonds on June 30 was $_____ 4. Book value of Bonds on December 31 was $_____ 5. Interest payment on June 30 was $_____
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