Question
Tahoe Tent Ltd. issued bonds with a par value of $812,000 on January 1, 2020. The annual contract rate on the bonds was 18.00%, and
Tahoe Tent Ltd. issued bonds with a par value of $812,000 on January 1, 2020. The annual contract rate on the bonds was 18.00%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 16.00%, and the bonds were sold for $849,538. a. What is the amount of the original premium on these bonds? (Use financial calculator for calculating PV's. Round the final answer to the nearest whole dollar.)
b. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.)
c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the premium. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.)
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