Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. 3. Prepare a straight-line amortization table for the bonds' first two years. Semiannual Period-End Unamortized Discount Carrying Value 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020
Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. 3. Prepare a straight-line amortization table for the bonds' first two years. Semiannual Period-End Unamortized Discount Carrying Value 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020
Chapter1: Financial Statements And Business Decisions
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Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%.
3. Prepare a straight-line amortization table for the bonds' first two years.
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Expert Solution
Step 1
Given that:
Face value of bonds = $325,000
Coupon rate = 5%
Issue price of bonds = $292181
Discount on bonds payable = Bond value - Issue price
= 325000 - 292181 = $32819
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