Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quatro Co issues bonds dated January 1, 2019, with a par value of $700,000. The bonds' annual contract rate is 13%, and interest is paid

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Quatro Co issues bonds dated January 1, 2019, with a par value of $700,000. The bonds' annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $717237 1. What is the amount of the premium on these bonds at issuance? 2 How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an effective interest amortization table for these bonds. (Round all amounts to the nearest whole dollar) Cash Interest Paid Bond Interest Expense Premium Amortization Unamortized Premium Carrying Value Semiannual Interest Period End 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020 06/30/2021 17.237 s 14,364 11.491 8.619 5,746 2,873 717,237 714,364 711,491 711,491 711,491 711.491 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much total bond interest expense will be recognized over the life of these bords? Total Bond Interest Expense Over the Life of the Bonds: Amount repaid 6 payments of 45.500 5 273,000 Par value at maturity 700,000 Total repaid 973.000 Less amount borrowed 717,237 Total bond interest expense $ 255,763 Required Required 2 Required a What is the amount of the premium on these bonds at issuance? s 17 237 Required 2

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Design Of Cost Management Systems

Authors: Robin Cooper, Robert S. Kaplan

2nd Edition

0135704170, 978-0135704172

More Books

Students also viewed these Accounting questions

Question

find all matrices A (a) A = 13 (b) A + A = 213

Answered: 1 week ago

Question

What were the reasons the collective agreement was achieved?

Answered: 1 week ago

Question

What does Copp say is the most important asset of any airline?

Answered: 1 week ago