
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Use the following to answer questions 4-7 (Round answers to the nearest dollar)
The company issues 8%, 5-year bonds with a total face amount of $100,000. The market interest rate for bo:ds cf similar
risk and maturity is 7.8%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE
THE PROBLEM SET (input your answers after you've completed the entire problem).
4. $
(rounded to nearest dollar). What is the issue price of the bond?=
1/Y=
FV=
PMT=
5. $
(rounded to nearest dollar). When the company records the first interest payment, how much will
the company record for interest expense?
6. $
payment?
(rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest
7. $
(rounded to nearest dollar). When the company records the second interest payment, how much will
the company record for interest expense?
FE
Use the following to answer questions 8-10 (Round answers to the nearest dollar)
The company issues 10%, 10-year bonds with a total face amount of $100,000. The market interest rate for bonds of
similar risk and maturity is 10%. Interest is paid semiannually.
8. $
What is the issue price of the bond?
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