Question
Wonder Woman Corporation issued bonds on January 1, 2020. Wonder Womans fiscal year end is December 31. Wonder Womans accountant, Diana Prince, projected the following
Wonder Woman Corporation issued bonds on January 1, 2020. Wonder Womans fiscal year end is December 31. Wonder Womans accountant, Diana Prince, projected the following amortization schedule from issuance until maturity:
Date | Cash payment for interest | Interest expense | Change in liability balance | Outstanding bond liability balance, End of period |
1/1/20 |
|
|
| 107,486 |
6/30/20 | 2,500 | 1,612 | -888 | 106,598 |
12/31/20 | 2,500 | 1,599 | -901 | 105,697 |
6/30/21 | 2,500 | 1,585 | -915 | 104,783 |
12/31/21 | 2,500 | 1,572 | -928 | 103,854 |
6/30/22 | 2,500 | 1,558 | -942 | 102,912 |
12/31/22 | 2,500 | 1,544 | -956 | 101,956 |
6/30/23 | 2,500 | 1,529 | -971 | 100,985 |
12/31/23 | 2,500 | 1,515 | -985 | 100,000 |
What is the annual coupon rate of interest for these bonds (in %)? [Note: Round to the nearest percent, meaning your answer should be in the form X (for X%) or 0.0X.]
What is the annual market rate of interest for these bonds (in %)? [Note: Round to the nearest percent, meaning your answer should be in the form X (for X%) or 0.0X.]
What is the bond liability balance (in $) that will appear on the 2022 year-end Balance Sheet?
What is the total interest expense (in $) that will appear on the 2022 annual Income Statement?
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