j) If they use effective interest amortization, how much of the discount (or premium) will they amortize in 20X1? k) If they use effective interest amortization, will interest expense for 20X2 be the same as, higher or lower than interest expense for 20X1? I) If they used effective interest amortization, how much will their net liability be on December 31, 20X1? [Choose ] [Choose ] [Choose ] >

j) If they use effective interest amortization, how much of the discount (or premium) will they amortize in 20X1? k) If they use effective interest amortization, will interest expense for 20X2 be the same as, higher or lower than interest expense for 20X1? I) If they used effective interest amortization, how much will their net liability be on December 31, 20X1? [Choose ] [Choose ] [Choose ] >

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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On January 1, 2024, Wildhorse Co. issued eight-year bonds with a face value of $6010000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 8 periods at 10% 0.46651 Present value of 1 for 8 periods at 12% 0.40388 Present value of 1 for 16 periods at 5% 0.45811 Present value of 1 for 16 periods at 6% 0.39365 Present value of annuity for 8 periods at 10% Present value of annuity for 8 periods at 12% Present value of annuity for 16 periods at 5% Present value of annuity for 16 periods at 6% 5.33493 4.96764 10.83777 10.10590 The present value of the principal is O $2365837. O $2427319. O $2753241. O $2803725.
On January 1, 2025, Sandhill Co. issued ten-year bonds with a face value of $5,125,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are. Present value of 1 for 10 periods at 10% 0.38554 Present value of 1 for 10 periods at 12% 0.32197 Present value of 1 for 20 periods at 5% 0.37689 Present value of 1 for 20 periods at 656 0.31180 Present value of annuity for 10 periods at 10% Present value of annuity for 10 periods at 12% Present value of annuity for 20 periods at 536 Present value of annuity for 20 periods at 6% 6.14457 5.65022 1246221 11.46992 (a) Calculate the issue price of the bonds. (Round final answer to O decimal places, e.g. 25,000) Issue price of bond $ eTextbook and Media Save for Later (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
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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