(Answered) Problem - mmr corp issued 80000 of 6 5-year bonds on

Accounting

Problem - MMR Corp. Issued $80,000 of 6%, 5-year bonds on December 31, 2015. Interest is paid semi-annually on June 30 and December 31. Consider the following for these bonds:

Disregard the above and assume the bonds were issued at 96 on December 31, 2015 and answer the following:

How much cash did MMR Corp receive on 12/31/2015?

Was the market rate of interest (higher) or (Low) than the contractual rate of interest?

What is the carrying value of the bonds on 12/31/2015?

How much interest expense will be recognized on 6/30/2016?

What is the carrying value of the bonds on December 31, 2017 (after making 4 interest payments)?

Disregard the above and assume that you have bonds with a face value of $100,000 and an unamortized premium of $2,000. Assume these bonds were called at 103 and calculate the gain or loss:

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