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Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2012. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash
Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2012. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Interest Increase in Carrying Paid Expense Carrying value value 1/1/12 $194,758 6/30/12 $7,000 $7,790 $790 195,548 12/31/12 7,000 7,822 822 196,370 6/30/13 7,000 7,855 855 197,225 12/31/13 7,000 7,889 889 198,114 6/30/14 7,000 7,925 925 199,039 12/31/14 7,000 7,961 961 200,000 What is the annual stated interest rate on the bonds? (Hint: Be sure to provide the annual rate rather than the six month rate.) a. 3%. b. 3.5%. c. 6%. d. 7%.
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