Problemtano issues bonds with a par value of 180000 on, Ask an Expert

Accounting

Problem:

Tano issues bonds with a par value of $180,000 on January 1, 2013. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862.

Required:

Question 1: What is the amount of the discount on these bonds at issuance?

Question 2: How much total bond interest expense will be recognized over the life of these bonds?

Question 3: Use the straight-line method to amortize the discount for these bonds

Note: Explain all calculation and formulas.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91163587

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