MC Qu. 59 LO 14-02, 14-04 Auerbach Inc. issued... Auerbach Inc. issued 8% bonds

Question

MC Qu. 59 LO 14-02, 14-04 Auerbach Inc. issued... Auerbach Inc. issued 8% bonds on October 1, 2013. The bonds have a maturity date of September 30, 2023 and a face value of $600 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2014. The effective interest rate established by the market was 10%. Assuming that Auerbach issued the bonds for $525,222,000, what would the company report for its net bond liability balance at December 31, 2013, rounded to the nearest thousand? (Do not round your intermediate calculation.) $599,000,000 $526,353,000 $513,222,000 $537,222,000

Explanation / Answer

Ans $526353000 ROUDED TO nearest thousands

Date Interest Payment of 8% for three months Interest expenses at 10% for 3 months*G Amortization of Bond C-B , balance in the a/c Bond Discount a/c Credit balance in the Bond payable Carrying value of Bond     In $ October 1,2013 -74778000 600000000 525222000 Dec 31,2013 12000000 13130550 1130550 -73647450 600000000 526352550

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.