On December 31, 2020, Blossom, Inc. sold $3,950,000 (face value) of bonds. The bonds are dated December 31, 2020. pay interest annually on December 31, and will mature on December 31, 2020. The following schedule was prepared by the accountant for 2020. Annual Interest Period Interest to be paid (a1) Interest Expense $197.500 $232.260 Amortization Stated interest rate. On the basis of the above information, answer the following questions. What is the stated interest rate for this bond issue? $34,760 Unamortized Amount $79,000 44,240 Bond Carrying Value $3,871,000 3,905,760
On December 31, 2020, Blossom, Inc. sold $3,950,000 (face value) of bonds. The bonds are dated December 31, 2020. pay interest annually on December 31, and will mature on December 31, 2020. The following schedule was prepared by the accountant for 2020. Annual Interest Period Interest to be paid (a1) Interest Expense $197.500 $232.260 Amortization Stated interest rate. On the basis of the above information, answer the following questions. What is the stated interest rate for this bond issue? $34,760 Unamortized Amount $79,000 44,240 Bond Carrying Value $3,871,000 3,905,760
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On December 31, 2020, Blossom, Inc. sold $3,950,000 (face value) of bonds. The bonds are dated December 31, 2020, pay
interest annually on December 31, and will mature on December 31, 2020. The following schedule was prepared by the
accountant for 2020. Annual Interest Period 1 (a1) Interest to be Paid $197,500 To Interest Expense Stated interest rate
$232,260 Amortization On the basis of the above information, answer the following questions. What is the stated interest
rate for this bond issue? $34,760 % Unamortized Amount $79,000 44,240 Bond Carrying Value $3,871,000 3,905,760
Transcribed Image Text:On December 31, 2020, Blossom, Inc. sold $3,950,000 (face value) of bonds. The bonds are dated December 31, 2020, pay interest
annually on December 31, and will mature on December 31, 2020. The following schedule was prepared by the accountant for 2020.
Annual
Interest Period
1
Interest to
be paid
(81)
$197.500
Interest
Expense
$232,260
Stated interest rate.
Amortization
On the basis of the above information, answer the following questions.
What is the stated interest rate for this band issue?
$34,760
Unamortized
Amount
%
$79,000
44,240
Bond
Carrying Value
$3,871,000
3,905,760
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