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No-More-Caviar Corporation issued ten-year term bonds on January 1, 2020, with a face value of $800,000. The face interest rate is 6 percent and interest payable semi-annually on June 30th and December 31st. The bonds were issued for $690,960 to yield an effective annual interest rate of 8 percent. The effective interest method of amortization is to be used. Determine the amount of unamortized bond discount to be written off on the second instalment of interest payment date on December 31,2020.

No-More-Caviar Corporation issued ten-year term bonds on January 1, 2020, with a face value of $800,000. The face interest rate is 6 percent and interest payable semi-annually on June 30th and December 31st. The bonds were issued for $690,960 to yield an effective annual interest rate of 8 percent. The effective interest method of amortization is to be used. Determine the amount of unamortized bond discount to be written off on the second instalment of interest payment date on December 31,2020.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 8RE
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No-More-Caviar Corporation issued ten-year term bonds on January 1, 2020, with a face value of $800,000. The face interest rate is 6 percent and interest payable semi-annually on June 30th and December 31st. The bonds were issued for $690,960 to yield an effective annual interest rate of 8 percent. The effective interest method of amortization is to be used.

 

Determine the amount of unamortized bond discount to be written off on the second instalment of interest payment date on December 31,2020. 

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