Question
On January 1, 2017, Learned Inc, issued $16 million face amount of 20-year, 18% stated rate bonds when market interest rates were 20%. The bonds
On January 1, 2017, Learned Inc, issued $16 million face amount of 20-year, 18% stated rate bonds when market interest rates were 20%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2036.
- Calculate the proceeds (issue price) of Learned Inc.s, bonds on January 1, 2017, if the bonds were sold to provide a market rate of return to the investor.
- Assume instead that the proceeds were $16,411,000. Record the journal entry to show the payment of semiannual interest and the related premium amortization on June 30, 2017, if the premium of $411,000 is amortized on a straight-line basis.
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
9780135811603
