QUESTION 7 What is the dollar amount of impact on Net Income at the end of the first year, related ONLY to any potential EMV change if Liberty Inc chooses to keep this bip at FMV? QUESTION 8 What if instead, at the end of the first year, the market interest rate had gone below the original market rate to 86. What would be the impact on Other Comprehensive Income due to the FMV change? QUESTION 4 On January 1, 2021, Liberty Inc. issued $100,000 of 10%, 10 year, annual long term bonds payable at 12%. Assume that discounts or premiums are amortized on the straight line basis. Suppose that at the end of the first year that financial analysts tell you that the current interest rate being paid on Liberty's exact type of B/P is equal to 14%. Be very careful on this question. If you make an error, in some cases, it will follow through. What is the present value of the bond on the date of issue? NOTE: The information in this question will be applied to a number of the next questions, QUESTIONS For the bond introduced in question the bond is issued at: 1. Discount 2. Premium QUESTION 6 At the end of the first year, the balance of the amortized bond will be 1. Cannot be determined from this information 2 Higher than the beginning carrying value 3. Equal to the carrying value 4 Lower than the beginning carrying value. V QUESTION 7 What is the dollar amount of impact on Net Income at the end of the first year, related ONLY to any potential EMV change if Liberty Inc chooses to keep this b/p at FMV? QUESTION 8 What if instead, at the end of the first year, the market interest rate had gone below the original market rate to 8%. What would be the impact on Other Comprehensive Income due to the FMV change? QUESTION 7 What is the dollar amount of impact on Net Income at the end of the first year, related ONLY to any potential EMV change if Liberty Inc chooses to keep this bip at FMV? QUESTION 8 What if instead, at the end of the first year, the market interest rate had gone below the original market rate to 86. What would be the impact on Other Comprehensive Income due to the FMV change? QUESTION 4 On January 1, 2021, Liberty Inc. issued $100,000 of 10%, 10 year, annual long term bonds payable at 12%. Assume that discounts or premiums are amortized on the straight line basis. Suppose that at the end of the first year that financial analysts tell you that the current interest rate being paid on Liberty's exact type of B/P is equal to 14%. Be very careful on this question. If you make an error, in some cases, it will follow through. What is the present value of the bond on the date of issue? NOTE: The information in this question will be applied to a number of the next questions, QUESTIONS For the bond introduced in question the bond is issued at: 1. Discount 2. Premium QUESTION 6 At the end of the first year, the balance of the amortized bond will be 1. Cannot be determined from this information 2 Higher than the beginning carrying value 3. Equal to the carrying value 4 Lower than the beginning carrying value. V QUESTION 7 What is the dollar amount of impact on Net Income at the end of the first year, related ONLY to any potential EMV change if Liberty Inc chooses to keep this b/p at FMV? QUESTION 8 What if instead, at the end of the first year, the market interest rate had gone below the original market rate to 8%. What would be the impact on Other Comprehensive Income due to the FMV change