The olowing intormation appls othe questions displayed below) Legacy issues $550

Question

The olowing intormation appls othe questions displayed below) Legacy issues $550,000 of 9.5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31, They are issued at $507,301 and their market rate is 12% at the issue date References eBook& Resources Section Break Difficulty: 3 Hard Learning Obj expense. 3. Prepare a straight-line amortization table for the bonds' first two years. 2. Determine the total bond interest expense to be recognized over the bonds life. Total bond interest expense over life of bonds: Amount repaid: Semiannual Period- Unamortized Carrying Value Discount 01/01/2015 06/30/2015 12/31/2015 06/30/2016 12/31/2016 payments of Par value at maturity Total repaid Less amount borrowed I bond interest expense References eBook & Resources References eBook & Resources Expanded table Learning Objective: 14-P1 Prepa entries to record bond issuance Expanded table Learning Objective: 14-P1 Prepare entries to record bond issuance and interest expense. interest expense.

Explanation / Answer

2 Amount repaid: 8 payments of $26125 209000 Par value at maturity 550000 Total repaid 759000 Less amount borrowed 507301 Total bond interest expense 251699 3 Semi-annual period Unamortized discount Carrying value 01-01-2015 42699 507301 06/30/2015 37362 512638 12/31/2015 32025 517975 06/30/2016 26688 523312 12/31/2016 21351 528649

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