Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds’ annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $757,732. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 What is the amount of the premium on these bonds at issuance? Premium Complete this question by entering your answers in the tabs below. Required 2 How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense Complete this question by entering your answers in the tabs below. Required 3 Prepare a straight-line amortization table for these bonds. (Round your intermediate calculations to the nearest dollar amount.) Semiannual Interest Period-End Unamortized Premium Carrying Value 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020 06/30/2021 12/31/2021

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 16E

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Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds’ annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $757,732.

1. What is the amount of the premium on these bonds at issuance?
2. How much total bond interest expense will be recognized over the life of these bonds?
3. Prepare a straight-line amortization table for these bonds.

Complete this question by entering your answers in the tabs below.

Required 1

What is the amount of the premium on these bonds at issuance?

Premium

Complete this question by entering your answers in the tabs below.

Required 2

How much total bond interest expense will be recognized over the life of these bonds?

Total Bond Interest Expense Over Life of Bonds:
Amount repaid:
	payments of
Par value at maturity
Total repaid
Less amount borrowed
Total bond interest expense

Complete this question by entering your answers in the tabs below.

Required 3

Prepare a straight-line amortization table for these bonds. (Round your intermediate calculations to the nearest dollar amount.)

Semiannual Interest Period-End	Unamortized Premium	Carrying Value
01/01/2019
06/30/2019
12/31/2019
06/30/2020
12/31/2020
06/30/2021
12/31/2021

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