Question
Vaughn Industries, Inc. issued $16,200,000 of 8% debentures on May 1, 2020 and received cash totaling $14,373,657. The bonds pay interest semiannually on May 1
Vaughn Industries, Inc. issued $16,200,000 of 8% debentures on May 1, 2020 and received cash totaling $14,373,657. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2025. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective-interest rate of 10%. Calculate the total dollar amount of discount or premium amortization during the first year (5/1/20 through 4/30/21) these bonds were outstanding. (Round answers to 0 decimal places, e.g. 5,275.)
Date | Interest Expense | Cash Interest | Discount Amortized | Carrying Value of Bonds |
5/1/20 | $ | |||
11/1/20 | $ | $ | $ | |
5/1/21 | ||||
Total | $ |
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