In January 1 20x1 abc company issued a 1000000 10 year bond with a stated interest rate of 9% payable annually every December 31st the market interest rate is 7% the bonds price is 1140160. liability be on December31, 20X1?m) If they used straight-line amortization, whatwill be the balance of thediscount (or premium)after the last interestpayment is made?[Choose ]n) If they use straight line [Choose]amortization, what will bethe bond's net liabilityafter the last interestpayment and just beforethe bond is paid off?

The bonds are issued at premium when market rate is lower than the coupon rate of bonds payable. The…

Answered: In January 1 20x1 abc company issued a…

In January 1 20x1 abc company issued a 1000000 10 year bond with a stated interest rate of 9% payable annually every December 31st the market interest rate is 7% the bonds price is 1140160.

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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Zorzi Corporation issues $500.000 of 9% bonds. due in 10 years, with interest payable semiannually At the time of issue, the market rate for such bonds is 10% Compute the issue price of the bonds O $500,000 O $469 000 O $468,845 O $468 000
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