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Huskey Mining Corporation issued bonds with a par value of $91,000 on January 1, 2023. The annual contract rate on the bonds is 8.50%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 10.50%, and the bonds were sold for $86,418. a. What is the amount of the original discount on these bonds? Discount $ 4,582 b. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Total interest expense $ 27,787 c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediote calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) Period Ending Cash Interest Paid Period Interest Expense Discount Amortization Unamortized Discount Carrying Value Jan. 1/23 $ 4,582 $ 86,418 June 30/23 3,868 4,537 669 3,913 87,087 Dec. 31/23 3,868 4,572 705 3,208 87,792 June 30/24 3,868 4,609 742 Dec. 31/24 3,868 4,648 781 June 30/25 3,868 4,689 821 90,136 Dec. 31/25 3,868 4,732 0 90,136 Totals $ 23,208 $ 27,787 $ 3,718

Huskey Mining Corporation issued bonds with a par value of $91,000 on January 1, 2023. The annual contract rate on the bonds is 8.50%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 10.50%, and the bonds were sold for $86,418. a. What is the amount of the original discount on these bonds? Discount $ 4,582 b. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Total interest expense $ 27,787 c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediote calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) Period Ending Cash Interest Paid Period Interest Expense Discount Amortization Unamortized Discount Carrying Value Jan. 1/23 $ 4,582 $ 86,418 June 30/23 3,868 4,537 669 3,913 87,087 Dec. 31/23 3,868 4,572 705 3,208 87,792 June 30/24 3,868 4,609 742 Dec. 31/24 3,868 4,648 781 June 30/25 3,868 4,689 821 90,136 Dec. 31/25 3,868 4,732 0 90,136 Totals $ 23,208 $ 27,787 $ 3,718

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...
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Huskey Mining Corporation issued bonds with a par value of $91,000 on January 1, 2023. The annual contract rate on the bonds is 8.50%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 10.50%, and the bonds were sold for $86,418. a. What is the amount of the original discount on these bonds? Discount $ 4,582 b. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Total interest expense $ 27,787 c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediote calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.)
Transcribed Image Text:Huskey Mining Corporation issued bonds with a par value of $91,000 on January 1, 2023. The annual contract rate on the bonds is 8.50%, and the interest is paid semiannually. The bonds mature after three years. The annual market interest rate at the date of issuance was 10.50%, and the bonds were sold for $86,418. a. What is the amount of the original discount on these bonds? Discount $ 4,582 b. How much total bond interest expense will be recognized over the life of these bonds? (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Total interest expense $ 27,787 c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediote calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.)
c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) Period Ending Cash Interest Paid Period Interest Expense Discount Amortization Unamortized Discount Carrying Value Jan. 1/23 $ 4,582 $ 86,418 June 30/23 3,868 4,537 669 3,913 87,087 Dec. 31/23 3,868 4,572 705 3,208 87,792 June 30/24 3,868 4,609 742 Dec. 31/24 3,868 4,648 781 June 30/25 3,868 4,689 821 90,136 Dec. 31/25 3,868 4,732 0 90,136 Totals $ 23,208 $ 27,787 $ 3,718
Transcribed Image Text:c. Present an amortization table for these bonds; use the effective interest method of allocating the interest and amortizing the discount. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) Period Ending Cash Interest Paid Period Interest Expense Discount Amortization Unamortized Discount Carrying Value Jan. 1/23 $ 4,582 $ 86,418 June 30/23 3,868 4,537 669 3,913 87,087 Dec. 31/23 3,868 4,572 705 3,208 87,792 June 30/24 3,868 4,609 742 Dec. 31/24 3,868 4,648 781 June 30/25 3,868 4,689 821 90,136 Dec. 31/25 3,868 4,732 0 90,136 Totals $ 23,208 $ 27,787 $ 3,718
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