Sun City issues $47 million of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value 01/01/2021 $51,324,372 06/30/2021 $2,350,000 $2,309,597 $40,403 51,283,969 12/31/2021 2,350,000 2,307,779 42,221 51,241,748 1. Were the bonds issued at face amount, a discount, or a premium? multiple choice Discount Premium Face amount 2. What is the original issue price of the bonds? Original price 3. What is the face amount of the bonds? Face amount 4. What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Stated annual interest rate % 5. What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Market annual interest rate % 6. What is the total cash paid for interest assuming the bonds mature in 20 years? Interest paid
Sun City issues $47 million of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value 01/01/2021 $51,324,372 06/30/2021 $2,350,000 $2,309,597 $40,403 51,283,969 12/31/2021 2,350,000 2,307,779 42,221 51,241,748 1. Were the bonds issued at face amount, a discount, or a premium? multiple choice Discount Premium Face amount 2. What is the original issue price of the bonds? Original price 3. What is the face amount of the bonds? Face amount 4. What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Stated annual interest rate % 5. What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Market annual interest rate % 6. What is the total cash paid for interest assuming the bonds mature in 20 years? Interest paid
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 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...
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Sun City issues $47 million of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below:
Date | Cash Paid | Interest Expense | Decrease in Carrying Value | Carrying Value | |
01/01/2021 | $51,324,372 | ||||
06/30/2021 | $2,350,000 | $2,309,597 | $40,403 | 51,283,969 | |
12/31/2021 | 2,350,000 | 2,307,779 | 42,221 | 51,241,748 |
1. Were the bonds issued at face amount, a discount, or a premium?
multiple choice
-
Discount
-
Premium
-
Face amount
2. What is the original issue price of the bonds?
|
3. What is the face amount of the bonds?
|
4. What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.)
|
5. What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.)
|
6. What is the total cash paid for interest assuming the bonds mature in 20 years?
|
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