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NoleCo issues bonds on January 1, 20X2. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $500,000 and the coupon/stated rate is 8%. The market rate on the issue date is 7%. The bonds were issued for $535,531. Required: Complete the three parts below. Part A: The interest expense that NoleCo should recognize on June 30, 20X2 is: $20,000 $17,500 $18,744 $18,826 $21,421   Part B: The interest expense that NoleCo should recognize on December 31, 20X2 is: $18,686 $20,000 $18,788 $18,700 $17,500   Part C: The carrying value of these bonds on December 31, 20X2 (after the interest payment on that date) is: $533,248 $502,556 $500,000 $538,087 $532,975

NoleCo issues bonds on January 1, 20X2. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $500,000 and the coupon/stated rate is 8%. The market rate on the issue date is 7%. The bonds were issued for $535,531. Required: Complete the three parts below. Part A: The interest expense that NoleCo should recognize on June 30, 20X2 is: $20,000 $17,500 $18,744 $18,826 $21,421   Part B: The interest expense that NoleCo should recognize on December 31, 20X2 is: $18,686 $20,000 $18,788 $18,700 $17,500   Part C: The carrying value of these bonds on December 31, 20X2 (after the interest payment on that date) is: $533,248 $502,556 $500,000 $538,087 $532,975

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...
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NoleCo issues bonds on January 1, 20X2. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $500,000 and the coupon/stated rate is 8%. The market rate on the issue date is 7%. The bonds were issued for $535,531.

Required: Complete the three parts below.

Part A: The interest expense that NoleCo should recognize on June 30, 20X2 is:

$20,000
$17,500
$18,744
$18,826
$21,421

 

Part B: The interest expense that NoleCo should recognize on December 31, 20X2 is:

$18,686
$20,000
$18,788
$18,700
$17,500

 

Part C: The carrying value of these bonds on December 31, 20X2 (after the interest payment on that date) is:

$533,248
$502,556
$500,000
$538,087
$532,975
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