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Please do every single one. I am not sure if my answers are correct. Thank you! Computing Amounts under Effective Interest and Straight-Line Interest Methods
Please do every single one. I am not sure if my answers are correct. Thank you!
Computing Amounts under Effective Interest and Straight-Line Interest Methods
For the following separate bond issues, assume that the bonds are sold on January 1, 2020, interest is paid semiannually on July 1 and December 31, and the bond term is 5 years. Complete the following schedule by measuring the bond selling price on January 1, 2020, and interest expense and interest paid for 2020.
- Note: Round your answers to the nearest whole dollar.
Case | Face Value of Bonds | Stated Rate | Market Rate | Amortization Method | Bond Selling Price | Interest Expense 2020 | Interest Paid 2020 |
---|---|---|---|---|---|---|---|
1 | $10,000 | 5% | 6% | Effective interest | Answer | Answer | Answer |
2 | 40,000 | 4% | 5% | Effective interest | Answer | Answer | Answer |
3 | 130,000 | 5% | 4% | Straight-line | Answer | Answer | Answer |
4 | 500,000 | 0% | 7% | Straight-line | Answer | Answer | Answer |
5 | 80,000 | 7% | 6% | Effective interest | Answer | Answer | Answer |
6 | 100,000 | 6% | 8% | Straight-line | Answer | Answer | Answer |
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