I'm stuck on this problem for Business Accounting, I got Required 1 right but I don't know how to do the rest: Stanford issues bonds dated January 1, 2019, with a par value of $259,000. The bonds’ annual contract rate is 8%, 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 10%, and the bonds are sold for $245,850. 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 an effective interest amortization table for these bonds. Required 2: How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: ??? payments of ??? ???? Par value at maturity ??? Total repaid ??? Less amount borrowed ??? Total bond interest expense ??? Required 3: Prepare an effective interest amortization table for these bonds. (Round all amounts to the nearest whole dollar.) Semiannual Interest Period-End Cash Interest Paid Bond Interest Expense Discount Amortization Unamortized Discount Carrying Value 01/01/2019 $245,850 06/30/2019 12/31/2019 06/30/2020 12/31/2020 06/30/2021 12/31/2021 Total

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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I'm stuck on this problem for Business Accounting, I got Required 1 right but I don't know how to do the rest:

Stanford issues bonds dated January 1, 2019, with a par value of $259,000. The bonds’ annual contract rate is 8%, 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 10%, and the bonds are sold for $245,850.

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 an effective interest amortization table for these bonds.

Required 2: How much total bond interest expense will be recognized over the life of these bonds?

Total Bond Interest Expense Over Life of Bonds:

Amount repaid:

???

payments of

???

????

Par value at maturity

???

Total repaid

???

Less amount borrowed

???

Total bond interest expense

???

Required 3: Prepare an effective interest amortization table for these bonds. (Round all amounts to the nearest whole dollar.)

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Discount Amortization	Unamortized Discount	Carrying Value
01/01/2019					$245,850
06/30/2019
12/31/2019
06/30/2020
12/31/2020
06/30/2021
12/31/2021
Total

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