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Use the following information to answer the next three questions. On January 1, 2017, Kerns Company issued a $20,000 face value bond that sold for

Use the following information to answer the next three questions.

On January 1, 2017, Kerns

Company issued a $20,000 face value bond that sold for 110. The bond had a ten-year term and

a stated annual interest rate of 8%. The straight-line method of amortization is used.

5.

The carrying value of the bond liability on January 1, 2017, would be

a. $22,000.

b. $20,000.

c. $21,800.

d. $20,200.

6.

The amount of interest expense reported on the companys 2017 income statement would be

a. $1,200.

b. $1,600.

c. $1,400.

d. $1,050.

7.

The amount of interest expense reported on the companys 2018 income statement would be

a. $1,600.

b. $1,400.

c. $1,800.

d. $2,000.

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