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Questions 17 to 22 relate to the following information: Ferry Inc issued a $250.000 bond on March 1, 2020 The bond has a stated interest
Questions 17 to 22 relate to the following information: Ferry Inc issued a $250.000 bond on March 1, 2020 The bond has a stated interest rate of 10%, matutes on March 1, 2023 and pays interest on September 1 and March 1 of every year. The market interest rate was 12% when the bond was issued Ferry Inc has a December 31 year end and uses the effective interest method to amortize bond discount or premium, and uses a discount or premium account. Present value factors for selected periods and interest rates are shown below. Periods 3 6 Present Value of $1 Present Value of Ordinary Annuity of S1 526 6 10% 12% 5% 6% 10% 1296 0.8638 0.8396 0.7513 0.7118 2.7232 2.6730 2.4869 2.4018 0.7462 0.7050 0.5645 0.5066 5.0757 4.9173 4.3553 4.1114 une 21.2 The interest expense Ferry Inc would record on December 31, 2020 is Select one O a $9.579 O $28.737 c $7.924 Od 58,735 Notes 22.32 Total interest expense during the bond's life would equal Select one a $75,000 Ob $87,284 O c $90,000 d. $77,314
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