Question
Torrs corporation issued 10,000,000, 6.5 Percent bonds dated April 1,2018. The market rate of interest was 7 percent with interest paid each March 31. The
Torrs corporation issued 10,000,000, 6.5 Percent bonds dated April 1,2018. The market rate of interest was 7 percent with interest paid each March 31. The bonds mature In three years on March 31st,2021. Tors fiscal year ends on December 31.
1. What was the issue price of these bonds
2. Compute the bonds interest expense for fiscal year 2018. The company uses the effective interest method of amortization
3. Show how the bonds should be reported on the statement kf financial position at December 31,2018
4. What amount of interest expense will be recorded on March 31,2019. Is this amount different of cash that is paid?
Please show work so I can understand.
Thank you
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