NoleCo issues bonds on January 1, 20X1. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $800,000 and the coupon/stated rate is 10%. The market rate on the issue date is 12%. The bonds were issued for $708,241. Required: Complete the three parts below. Part A: The interest expense that NoleCo should recognize on June 30, 20X1 is: $48,000 $35,412 $42,494 $40,000 $43,146 Part B: The interest expense that NoleCo should recognize on December 31, 20X1 is: $42,345 $48,000 $43,290 $42,644 $40,000 Part C: The carrying value of these bonds on December 31, 20X1 (after the interest payment on that date) is: $800,000 $713,379 $710,735 $708,241 $714,677
NoleCo issues bonds on January 1, 20X1. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $800,000 and the coupon/stated rate is 10%. The market rate on the issue date is 12%. The bonds were issued for $708,241. Required: Complete the three parts below. Part A: The interest expense that NoleCo should recognize on June 30, 20X1 is: $48,000 $35,412 $42,494 $40,000 $43,146 Part B: The interest expense that NoleCo should recognize on December 31, 20X1 is: $42,345 $48,000 $43,290 $42,644 $40,000 Part C: The carrying value of these bonds on December 31, 20X1 (after the interest payment on that date) is: $800,000 $713,379 $710,735 $708,241 $714,677
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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NoleCo issues bonds on January 1, 20X1. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face
Required: Complete the three parts below.
Part A: The interest expense that NoleCo should recognize on June 30, 20X1 is:
$48,000
$35,412
$42,494
$40,000
$43,146
Part B: The interest expense that NoleCo should recognize on December 31, 20X1 is:
$42,345
$48,000
$43,290
$42,644
$40,000
Part C: The carrying value of these bonds on December 31, 20X1 (after the interest payment on that date) is:
$800,000
$713,379
$710,735
$708,241
$714,677
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