On January 1, 2018, Hart Company issued bonds with a face value of $206,000, a stated rate of interest of 14 percent, and a ten-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 16 percent at the time the bonds were issued. The bonds sold for $186,087. Hart used the effective interest method to amortize the bond.

Required:

1. Determine the amount of the discount on the day of issue.

2. Determine the amount of interest expense recognized on December 31, 2018. (Round your answer to the nearest whole dollar amount.)

3. Determine the carrying value of the bond liability on December 31, 2018. (Round the intermediate calculations and final answer to nearest whole dollar amount.)

On January 1, 2018, Hart Company issued bonds with a face value of $206,000, a stated rate of interest of 14 percent, and a ten-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 16 percent at the time the bonds were issued. The bonds sold for $186,087. Hart used the effective interest method to amortize the bond. Required: a. Determine the amount of the discount on the day of issue. b. Determine the amount of interest expense recognized on December 31, 2018. (Round your answer to the nearest whole dollar amount.) c. Determine the carrying value of the bond liability on December 31, 2018. (Round the intermediate calculations and final answer to nearest whole dollar amount.) a. Discount b. Interest expense C. Carrying value