Discount-Mart issues $12 million in bonds on January 1, 2018. The bonds have a eight-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedulethe bonds:Date1/1/186/30/1812/31/186/30/1912/31/1900013%.12%.6%Cash PaidO 14%.$720,000720,000720,000720,000InterestExpenseWhat is the market annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six month rate.) (Do not round your intermediate calculations.)$760,648763,494766,538769,796Increase inCarrying Value$40,64843,49446.53849,796CarryingValue$10,866,40210,907,05010.950,54410,997,08211,046,878

Market rate is the on going interest rate of the bond in a free market.

Answered: $760,648 763,494 766,538 769,796…

Business

Accounting

$760,648 763,494 766,538 769,796 $40,648 43,494 46,538 49,796 10,907,050 10,950,544 10,997,082 11,046,878

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EB: Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market...

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Question

Discount-Mart issues $12 million in bonds on January 1, 2018. The bonds have a eight-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule
the bonds:
Date
1/1/18
6/30/18
12/31/18
6/30/19
12/31/19
000
13%.
12%.
6%
Cash Paid
O 14%.
$720,000
720,000
720,000
720,000
Interest
Expense
What is the market annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six month rate.) (Do not round your intermediate calculations.)
$760,648
763,494
766,538
769,796
Increase in
Carrying Value
$40,648
43,494
46.538
49,796
Carrying
Value
$10,866,402
10,907,050
10.950,544
10,997,082
11,046,878

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