Answered: b. Calculate the interest expense on… | bartleby

Financial Accounting Intro Concepts Meth/Uses

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 20E

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Accounting for Bonds Sold at a Discount
The Peoples National Bank raised capital through the sale of $60 million face value of four percent coupon rate, ten-year bonds. The bonds paid interest semiannually and were sold at a time when equivalent risk-rated bonds carried a yield rate of six percent.
Round all answers to the nearest whole number.
a. Calculate the proceeds that The Peoples National Bank received from the sale of the six percent bonds.
$ 51,073,515
b. Calculate the interest expense on the bonds for the first year that the bonds are outstanding.
$2,400,000
X
c. Calculate the book value of the bonds at the end of the first year.
$ 51,966,164
X
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