Calculations Marketing Inc. issued 10.5% bonds with a par value of $440,000 and a five-year life on January 1, 2023, for $448,494. The bonds pay interest on June 30 and December 31. The market interest rate was 10% on the original issue date. Use TABLE 14A.1 and TABLE 14A.2. (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the total bond interest expense over the life of the bonds. Total interest expense 2. Prepare an amortization table using the effective interest method. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Period Ending Cash Interest Paid Period Interest Expense Premium Amort. Unamortized premium Carrying Value Jan. 1/23 June 30/23 Dec. 31/23 June 30/24 Dec. 31/24 June 30/25
Calculations Marketing Inc. issued 10.5% bonds with a par value of $440,000 and a five-year life on January 1, 2023, for $448,494. The bonds pay interest on June 30 and December 31. The market interest rate was 10% on the original issue date. Use TABLE 14A.1 and TABLE 14A.2. (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the total bond interest expense over the life of the bonds. Total interest expense 2. Prepare an amortization table using the effective interest method. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Period Ending Cash Interest Paid Period Interest Expense Premium Amort. Unamortized premium Carrying Value Jan. 1/23 June 30/23 Dec. 31/23 June 30/24 Dec. 31/24 June 30/25
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Calculations Marketing Inc. issued 10.5% bonds with a par value of $440,000 and a five-year life on January 1, 2023, for $448,494. The
bonds pay interest on June 30 and December 31. The market interest rate was 10% on the original issue date. Use TABLE 14A.1 and
TABLE 14A.2. (Use appropriate factor(s) from the tables provided.)
Required:
1. Calculate the total bond interest expense over the life of the bonds.
Total interest expense
2. Prepare an amortization table using the effective interest method. (Do not round intermediate calculations. Round the final
answers to the nearest whole dollar.)
Period
Ending
Cash Interest
Paid
Period
Interest
Expense
Premium
Amort.
Unamortized
premium
Carrying Value
Jan. 1/23
June 30/23
Dec. 31/23
June 30/24
Dec. 31/24
June 30/25
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