(1) (2) (3) (4) Decrease in (5) Carrying Cash Paid Interest Date for Interest Expense Carrying Value Value 1/1/2021 $66,934,432 6/30/2021 $2,100,000 $2,008,033 $91,967 66,842,465 12/31/2021 2,100,000 2,005,274 94,726 66,747,739

(1) (2) (3) (4) Decrease in (5) Carrying Cash Paid Interest Date for Interest Expense Carrying Value Value 1/1/2021 $66,934,432 6/30/2021 $2,100,000 $2,008,033 $91,967 66,842,465 12/31/2021 2,100,000 2,005,274 94,726 66,747,739

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 5MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at...

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Question

Temptation Vacations issues $60 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:

Required:
1. Were the bonds issued at face amount, a discount, or a premium?
2. What is the original issue price of the bonds?
3. What is the face amount of the bonds?
4. What is the stated annual interest rate?
5. What is the market annual interest rate?
6. What is the total cash paid for interest assuming the bonds mature in 20 years?

(1)
(2)
(3)
(4)
Decrease in
(5)
Carrying
Cash Paid
Interest
Date
for Interest
Expense
Carrying Value
Value
1/1/2021
$66,934,432
6/30/2021
$2,100,000
$2,008,033
$91,967
66,842,465
12/31/2021
2,100,000
2,005,274
94,726
66,747,739

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