Exercise 14-15 Allocation of interest for bonds sold at a premium LO6 Tahoe Tent Ltd. issued bonds with a par value of $802,000 on January 1, 2020. The annual contract rate on the bonds was 13.00%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 11.00%, and the bonds were sold for $842,064. a. What is the amount of the original premium on these bonds? (Use financial calculator for calculating PV's. Round the final answer to the nearest whole dollar.) Premium 6. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Pound +he finel enswer to the neerest whele celler)
Exercise 14-15 Allocation of interest for bonds sold at a premium LO6 Tahoe Tent Ltd. issued bonds with a par value of $802,000 on January 1, 2020. The annual contract rate on the bonds was 13.00%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 11.00%, and the bonds were sold for $842,064. a. What is the amount of the original premium on these bonds? (Use financial calculator for calculating PV's. Round the final answer to the nearest whole dollar.) Premium 6. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Pound +he finel enswer to the neerest whele celler)
Financial & Managerial Accounting
13th Edition
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Long-Term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 12.5BPR
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