Tano Company issues bonds with a par value of $180,000 on January 1 of the current year. Thebonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, andthe bonds are sold for $170,864.Par valueContract rateTermMarket rateProceedsPayments per yearRequired:1. What is the amount of the discount on these bonds at issuance?DiscountTotal repaidLess amount borrowedTotal bond interest expense$9,1362. How much total bond interest expense will be recognized over the life of these bonds?Total Bond Interest Expense Over Life of Bonds:Amount repaid:GUEUNEO(0)2 payments ofPar value at maturity(2)(3)(4)(5)(6)Amount of semi-annual discount amortization$180,0008963. Prepare a straight-line amortization table for these bonds.SemiannualPeriod-End3 years10%$170,86421/1/20246/30/202412/31/20246/30/202512/31/20256/30/202612/31/2026$5,400UnamortizedDiscount$10,800180,000180,000(170,864)$9.136$170,864Carrying Value

Bond :— It is one of the type of securities that pays fixed periodic interest and face value amount…

Tano Company issues bonds with a par value of $180,000 on January 1 of the current year. 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. Par value Contract rate Term Market rate Proceeds Payments per year Required: 1. What is the amount of the discount on these bonds at issuance? Discount 2. How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: Total repaid Less amount borrowed Total bond interest expense OFEUNLO 59,136 (0) 2 payments of Par value at maturity (2) (3) (4) (5) (6) $180,000 896 1/1/2024 6/30/2024 12/31/2024 6/30/2025 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization 12/31/2025 6/30/2026 12/31/2026 3 years 10% $170,864 2 Semiannual Unamortized Period-End Discount $5,400 $10,800 180,000 $170,864 180,000 (170,864) $9.136 Carrying Value

Tano Company issues bonds with a par value of $180,000 on January 1 of the current year. 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. Par value Contract rate Term Market rate Proceeds Payments per year Required: 1. What is the amount of the discount on these bonds at issuance? Discount 2. How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: Total repaid Less amount borrowed Total bond interest expense OFEUNLO 59,136 (0) 2 payments of Par value at maturity (2) (3) (4) (5) (6) $180,000 896 1/1/2024 6/30/2024 12/31/2024 6/30/2025 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization 12/31/2025 6/30/2026 12/31/2026 3 years 10% $170,864 2 Semiannual Unamortized Period-End Discount $5,400 $10,800 180,000 $170,864 180,000 (170,864) $9.136 Carrying Value

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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am. 106.
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