Stinson Corporation issued $520,000 of 5%, 10-year bonds payable on March 31, 2019. The market interest rate at the date of issuance was 9%, and the bonds pay interest semiannually. Stinson Corporation's year-end is March 31. Review the following amortization table for Stinson's bonds: Using the amortization table for Stinson's bonds, answer the questionsbelow: Semiannual Interest Interest Discount Discount Bond Interest Date Payment Expense Amortization Balance Carying Amt Mar 31, 2019 $ 135,283 384,717 Sep 30, 2019 $ 13,000 $ 17,312 $ 4,312 130,971 389,029 Mar 31, 2020 13,000 17,506 4,506 126,465 393,535 Sep 30, 2020 13, 000 17,709 4,709 121,756 398,244 1 How much cash did Stinson Corporation borrow on March 31, 2019? How much cash will the company pay back at maturity on March 31, 2029? 2 How much cash interest will the company pay each six months? 3 How much interest expense will Stinson Corporation report on September 30, 2019, and on March 31, 2020? Why does the amount of interest expense increase each period?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5PB: Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

See similar textbooks

Related questions

Question

Stinson Corporation issued $520,000 of 5%, 10-year bonds payable on March 31, 2019. The market interest rate at the date of issuance was 9%, and the bonds pay interest semiannually. Stinson Corporation's year-end is March 31. Review the following amortization table for Stinson's bonds:

Using the amortization table for Stinson's bonds, answer the questionsbelow:

Semiannual Interest Interest Discount Discount Bond Interest Date Payment Expense Amortization Balance Carying Amt

Mar 31, 2019 $ 135,283 384,717

Sep 30, 2019 $ 13,000 $ 17,312 $ 4,312 130,971 389,029

Mar 31, 2020 13,000 17,506 4,506 126,465 393,535

Sep 30, 2020 13, 000 17,709 4,709 121,756 398,244

1	How much cash did Stinson Corporation borrow on March 31, 2019? How much cash will the company pay back at maturity on March 31, 2029?
2	How much cash interest will the company pay each six months?
3	How much interest expense will Stinson Corporation report on September 30, 2019, and on March 31, 2020? Why does the amount of interest expense increase each period?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions