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Question 19 (20 points) A 5-year, $100,000 bond with a stated interest rate of 8.00%. The market rate is 12.00%. Interest is to be paid
Question 19 (20 points) A 5-year, $100,000 bond with a stated interest rate of 8.00%. The market rate is 12.00%. Interest is to be paid semi-annually. What is the journal entry to record interest payments in year three (Using the straight-line method of amortization) a) Debit Interest Expense 5.472.06 and Credit Cash 5.472.06 b) Debit Interest Expense 5.472.06. Credit Discount Amortized 1.472.06 and Credit Cash 4.000 c) None of these entries is correct d) Debit Cash 4,000 and Debit Discount Amortized 1.472.06 and Credit Interest Expense 5.472.06 Question 9 (20 points) Tu-Tu Corp issues a 6-year, $100,000 bond with a stated interest rate of 10.00% The market rate is 8.00%. Interest is paid semi-annually. What is the amortized premium amount at the end of year 3? (The effective interest rate method of amortization is used.) a) $624.59 Ob) $675.55 O c) $649.57 d) None of these is the correct
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