On January 1, 2018, White, Inc. issues $1,000,000 total face value, 10-yr bonds with an annual stated interest rate of 5%. Interest is paid semi-annually on June 30^th and December 31st. The company received $559,260 upon issuance. The chart below may help, but will not be graded. (Solutions included below; Need Steps to get to the answers)

Period	Cash Paid	Interest Expense	Amortization of Discount/Premium	Unamortized Premium/Discount	Bonds Carrying Value (Book Value)
Issuance	Dont use	Dont use	Dont use
6/30/2018
12/31/2018
6/30/2019

Are the bonds issued at a premium, a discount, or at face value? What is the (annual) market interest rate at the time of issue?

How much cash is paid to the bondholder on December 31, 2018?

How much Interest Expense would be recorded for 2018?

What would be the Carrying Value of the bonds at June 30, 2019?

On December 31, 2020, when the annual market rate of interest was 6%, White repurchased 10% of these bonds on the open market and retired the debt. What Gain or Loss would White record at that time?

Solutions

1	Discount
2	13.00%
3	25,000
4	73,442
5	595,577
6	30,407.29	Loss