Exercise 14-8 Presented below are three independent situations. (a) Nash Co. sol

Question

Exercise 14-8

Presented below are three independent situations.

(a) Nash Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on July 1 and January 1. If Nash uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2017, and December 31, 2017. (Round answer to 0 decimal places, e.g. 38,548.)

(b) Crane Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2017, for $471,929. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Crane uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2017. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)

Interest expense to be recorded $

CALEULATOR FULL SCREEN PRINTER VERSSON BACK NE Exercise 14-8 eater14 Presented beliow are Eree independent situatens prerum or dscont Interest expense to be recorded (b) Crane be, issued SS70,000 of 9%, 10-yer bonds on ane 30, 2017. for S471,92. This answer to 0 decimal places, e 38,548.) Interest expense to be recorded Click if you would like to Show Work for this question: Q Sh.Wak determine n·amort of interest expense to be reported on My 1, 2017, nd December 31, 2017. (Round answer to 0 decinal places eg. Jes4a) ee powdec a yeld of 12% on tre bonds. Interest is payable semannealv an Oecmoe i and ho se rome uses tie determine tre amount ofiterest expense to record if financial stanements are issued on Octsber 31, 2017. (Round intermediate calculations to & decimal places, e.g. 1.2s1247 and na by Question Attempts, 0 of 15 used SAVE FOR LATER Version 4.2 ssignmenthest/aglist.un?idaa

Explanation / Answer

a Premium on issue = 1950000*6%= 117000 Semiannual premium amortization = 117000/20= 5850 Interest expense to be recorded =(1950000*6%)-5850= 111150 b Interest expense to be recorded =(471929*12%/12*4)= 18877

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