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Tano Company issues bonds with a par value of $180,000 on January 1, 2021. 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 $170,864. Required: 1. What is the amount of the discount on these bonds at issuance? (Use cells A2 to M5 from the given information to complete this question.) Discount 2. How much total bond interest expense will be recognized over the life of these bonds? (Use cells A2 to M5 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values.) Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization (0) (1) (2) (3) (4) (5) (6) Semiannual Period-End 1/1/2021 6/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 Unamortized Discount Carrying Value

Tano Company issues bonds with a par value of $180,000 on January 1, 2021. 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 $170,864. Required: 1. What is the amount of the discount on these bonds at issuance? (Use cells A2 to M5 from the given information to complete this question.) Discount 2. How much total bond interest expense will be recognized over the life of these bonds? (Use cells A2 to M5 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values.) Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization (0) (1) (2) (3) (4) (5) (6) Semiannual Period-End 1/1/2021 6/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 Unamortized Discount Carrying Value

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...
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Tano Company issues bonds with a par value of $180,000 on January 1, 2021. 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 $170,864. Required: 1. What is the amount of the discount on these bonds at issuance? (Use cells A2 to M5 from the given information to complete this question.) Discount 2. How much total bond interest expense will be recognized over the life of these bonds? (Use cells A2 to M5 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values.) Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization (0) (1) (2) (3) (4) (5) (6) Semiannual Period-End 1/1/2021 6/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 Unamortized Discount Carrying Value
Transcribed Image Text:Tano Company issues bonds with a par value of $180,000 on January 1, 2021. 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 $170,864. Required: 1. What is the amount of the discount on these bonds at issuance? (Use cells A2 to M5 from the given information to complete this question.) Discount 2. How much total bond interest expense will be recognized over the life of these bonds? (Use cells A2 to M5 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values.) Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization (0) (1) (2) (3) (4) (5) (6) Semiannual Period-End 1/1/2021 6/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 Unamortized Discount Carrying Value
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