QS 14-22B (Algo) Effective Interest: Bond premium computations LO P5Garcia Company issues 10%, 15-year bonds with a par value of $190,000 and semiannual interest payments. On the issue date, theannual market rate for these bonds is 8%, which implies a Selling price of 117 4. The effective interest method is used to allocateinterest expense.1. What are the issuer's cash proceeds from issuance of these bonds?2. What total amount of bond interest expense will be recognized over the life of these bonds?3. What amount of bond interest expense is recorded on the first interest payment date?Complete this question by entering your answers in the tabs below.Required 1 Required 2Required 3What are the issuer's cash proceeds from issuance of these bonds?Cash proceedsRequired 1Required 2 >

The bonds are reported as the long-term liabilities in the balance sheet. The bonds are issued at…

Answered: Garcia Company issues 10%, 15-year…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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On January 1, 2024, Cullumber Co. issued eight-year bonds with a face value of $5920000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Table values are: Present value of 1 for 8 periods at 4% Present value of 1 for 8 periods at 6% Present value of 1 for 16 periods at 2% Present value of 1 for 16 periods at 3% Present value of annuity for 8 periods at 4% Present value of annuity for 8 periods at 6% Present value of annuity for 16 periods at 2% Present value of annuity for 16 periods at 3% The present value of the principal is O $4312424. O $4325685. O $3714267. O $3689166. 0.73069 0.62741 0.72845 0.62317 6.73274 6.20979 13.57771 12.56110
Garcia Company issues 10%, 15-year bonds with a par value of $310,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 %. The effective interest method is used to allocate interest expense. 1. What are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What amount of bond interest expense is recorded on the first interest payment date? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What amount of bond interest expense is recorded on the first interest payment date? Bond interest expense
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