QS 10-9 Straight-Line: Premium bond computations LO P3

Enviro Company issues 12.00%, 10-year bonds with a par value of $330,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 9.00%, which implies a selling price of 125.375. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 125.375. what are the issuers cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?

Required 1 Required 2 Required 3 Using the implied selling price of 125.375. what are the issuer's cash proceeds from issuance of these bonds? Cash proceeds Required 1 Required 2 Required 3 What total amount of bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repayments Less amount borrowed (from part 1) Total bond interest expense Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the amount of bond interest expense recorded on the first interest payment date? Bond interest expense