Question
ServersRus Inc. Issues $25,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2016. Interest is paid on June 30 and December 31. The proceeds
ServersRus Inc. Issues $25,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2016. Interest is paid on June 30 and December 31. The proceeds from the bonds are $24,505,180.
Using straight-line amortization:
- How much is interest expense in 2017?
- What will the carrying value of the bonds be on the December 31, 2017 balance sheet?
- How much is interest expense for 2018?
- What is the carrying value of the bonds on December 31, 2018?
Using effective-interest amortization:
1. How much is interest expense in 2017?
2. What will the carrying value of the bonds be on the December 31, 2017 balance sheet?
3. How much is interest expense in 2018?
4. What will the carrying value of the bonds be on the December 31, 2018 balance sheet?
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Precalculus
Authors: Michael Sullivan
9th edition
321716835, 321716833, 978-0321716835
