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Duncan Manufacturing Inc. has $210,000 of 6% debenture bonds outstanding. The bonds were issued at 111 in 2020 and mature in 2040. Requirements 1. How much cash did Duncan receive when it issued these bonds? 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? 3. Take the difference between your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. 4. Compute Duncan's annual interest expense by the straight-ine amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Requirement 1. How much cash did Duncan receive when it issued these bonds? Duncan Manufacturing Inc. received sat bond issuance. Requirement 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? Duncan Manufacturing Inc. will pay the bondholders $O through the maturity date of the bonds. Requirement 3. Take the diference betveen your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. The difference between your answers to Requirements 1 and 2 is SO. Requirement 4. Compute Duncan's annual interest expense by the straight-line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Duncan's annual interest expense by the straight-line amortization method is sO. Multiply the annual interest expense by 20: S].

Duncan Manufacturing Inc. has $210,000 of 6% debenture bonds outstanding. The bonds were issued at 111 in 2020 and mature in 2040. Requirements 1. How much cash did Duncan receive when it issued these bonds? 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? 3. Take the difference between your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. 4. Compute Duncan's annual interest expense by the straight-ine amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Requirement 1. How much cash did Duncan receive when it issued these bonds? Duncan Manufacturing Inc. received sat bond issuance. Requirement 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? Duncan Manufacturing Inc. will pay the bondholders $O through the maturity date of the bonds. Requirement 3. Take the diference betveen your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. The difference between your answers to Requirements 1 and 2 is SO. Requirement 4. Compute Duncan's annual interest expense by the straight-line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Duncan's annual interest expense by the straight-line amortization method is sO. Multiply the annual interest expense by 20: S].

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Duncan Manufacturing Inc. has $210,000 of 6% debenture bonds outstanding. The bonds were issued at 111 in 2020 and mature in 2040. Requirements 1. How much cash did Duncan receive when it issued these bonds? 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? 3. Take the difference between your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. 4. Compute Duncan's annual interest expense by the straight-line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Requirement 1. How much cash did Duncan receive when it issued these bonds? Duncan Manufacturing Inc. received $ at bond issuance. Requirement 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? Duncan Manufacturing Inc. will pay the bondholders $ through the maturity date of the bonds. Requirement 3. Take the difference between your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. The difference between your answers to Requirements 1 and 2 is S Requirement 4. Compute Duncan's annual interest expense by the straight-line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Duncan's annual interest expense by the straight-line amortization method is S. Multiply the annual interest expense by 20: $
Transcribed Image Text:Duncan Manufacturing Inc. has $210,000 of 6% debenture bonds outstanding. The bonds were issued at 111 in 2020 and mature in 2040. Requirements 1. How much cash did Duncan receive when it issued these bonds? 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? 3. Take the difference between your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. 4. Compute Duncan's annual interest expense by the straight-line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Requirement 1. How much cash did Duncan receive when it issued these bonds? Duncan Manufacturing Inc. received $ at bond issuance. Requirement 2. How much cash in total will Duncan pay the bondholders through the maturity date of the bonds? Duncan Manufacturing Inc. will pay the bondholders $ through the maturity date of the bonds. Requirement 3. Take the difference between your answers to Requirements 1 and 2. This difference represents Duncan's total interest expense over the life of the bonds. The difference between your answers to Requirements 1 and 2 is S Requirement 4. Compute Duncan's annual interest expense by the straight-line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to Requirement 3. Duncan's annual interest expense by the straight-line amortization method is S. Multiply the annual interest expense by 20: $
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