Exercise 10-4 (Algo) Straight-Line: Amortization of bond discount LO P2 Tano Company issues bonds with a par value of $82,000 on January 1, 2021. The bonds' annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $79,849. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a straight-line amortization table for these bonds. Note: Round your intermediate calculations to the nearest dollar amount. Semiannual Period-End Unamortized Carrying Value Discount (0) 01/01/2021 $ 2,151 $ 79,849 (1) 06/30/2021 80,208 (2) 12/31/2021 80,566 (3) 06/30/2022 80,925 (4) 12/31/2022 81,283 (5) 06/30/2023 358 81,642 (6) 12/31/2023 $ 0 $ 82,000 < Required 2 Required 3 >

Exercise 10-4 (Algo) Straight-Line: Amortization of bond discount LO P2 Tano Company issues bonds with a par value of $82,000 on January 1, 2021. The bonds' annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $79,849. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a straight-line amortization table for these bonds. Note: Round your intermediate calculations to the nearest dollar amount. Semiannual Period-End Unamortized Carrying Value Discount (0) 01/01/2021 $ 2,151 $ 79,849 (1) 06/30/2021 80,208 (2) 12/31/2021 80,566 (3) 06/30/2022 80,925 (4) 12/31/2022 81,283 (5) 06/30/2023 358 81,642 (6) 12/31/2023 $ 0 $ 82,000 < Required 2 Required 3 >

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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