Santa Corporation issued a bond on January 1 of this year with a face value of $1,000. The bond's coupon rate is 6 percent and interest is paid once a year on December 31. The bond matures in three years. The annual market rate of interest was 8 percent at the time the bond was sold.
The following amortization schedule pertains to the bond issued:
Cash
Paid Interest
Expense Amortization Balance
January 1, Year 1 $948
December 31, Year 1 $60 $76 $16 964
December 31, Year 2 60 77 17 981
December 31, Year 3 60 79 19 1,000
Required:
1. What was the bond's issue price?
2. Did the bond sell at a discount or a premium? How much was the premium or discount?
3. What amount(s) should be shown on the balance sheet for bonds payable at the end of Year 1 and Year 2?
4. Show how the following amounts were computed for Year 2: (a) $60, (b) $77, (c) $17, and (d) $981. (Enter percentages in decimals.)
Answers: 1
Business, 21.06.2019 16:30
Collective bargaining provides for a representative of employees to negotiate with a representative of management over labor issues including wages.true or false?
Answers: 3
Business, 22.06.2019 11:00
Zoe would like to be able to save for night courses at the local college. which of these would be a good way for zoe to make more money available for savings without dramatically changing her budget? economÃa
Answers: 2
Business, 22.06.2019 13:50
Classify each of the following items as a public good, a private good, a natural monopoly good, or a common resource.(a) measles vaccinations (b) tuna in the pacific ocean (c) airline service in the united states (d) local storm-water system
Answers: 1
Business, 22.06.2019 19:50
The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.
Answers: 2
Santa Corporation issued a bond on January 1 of this year with a face value of $1,000. The bond's co...
Biology, 23.10.2019 20:50
Chemistry, 23.10.2019 20:50
Social Studies, 23.10.2019 20:50
Business, 23.10.2019 20:50
English, 23.10.2019 20:50
History, 23.10.2019 20:50
Physics, 23.10.2019 20:50
Business, 23.10.2019 20:50