Stafford co. issued $200,000 face value, 6%, 10-year bonds on january 1, 2017 for $172,740. the market rate of interest was 8%. interest is payable semi-annually on june 30 and december 31. staffer uses the effective interest method to amortize bond premium or discount.
a) determine the amount of interest expense to be recorded with the first cash interest payment.
(b) determine the carrying value of the bonds on december 31, 2017, after the interest payment has been made.
c) how much interest expense would be recorded on the 2017 income statement?
(d) if the bonds are selling at 103 on december 31, 2018, have market interest rates increased or decreased since the bonds were issued?

Susie buys two goods - rounds of golf and massages. suppose that the price of a round of golf is $20, and the price of a massage is $30. in a typical week susie will play two rounds of golf, getting 20 units of satisfaction from the second round. she normally buys three massages each week, with the third giving her 30 units of satisfaction. if she were to buy a fourth massage in a week, it would give her 20 units of satisfaction. if the price of massages is reduced to $15, which of the following outcomes might we expect to occur? a) susie would leave her consumption choices unchanged because of diminishing marginal utility in the consumption of massages. b) susie would buy more massages and more rounds of golf, as predicted by the substituion effect. c) susie would buy more massages and fewer rounds of golf, as predicted by the substitution effect. d) susie would buy more massage and fewer rounds of golf, as predicted by income effect.