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Use the information below to answer questions 911. Sail and Sink Inc. issues $425,000 of 6%, 5-year bonds for cash proceeds of $390,529. The market
Use the information below to answer questions 911. Sail and Sink Inc. issues $425,000 of 6%, 5-year bonds for cash proceeds of $390,529. The market interest rate is 8%. Interest is paid semi-annually. 9. To the nearest dollar, how much bond interest expense is recorded on the first interest date? (a) $12,750 (b) $15,621 (c) $17,000 (d) $2,871 10. To the nearest dollar, what is the carrying amount of the bonds after the first interest payment? (a) $395,600 (b) $ 387,658 (C) $ 393,400 (d) $ 425,000 11. What is the total interest cost over the life of the bonds? (a) $127,500 (b) $34,471 (c) $ 255,000 (d) $161,971
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