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On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8% maturing in 4 years. The interest is paid annually, and the market interest rate at the date of issue was 11%. What is the issue price of the bond? Prepare the 4 year amortization schedule for the bond. Perio Amortization Interest to be Interest Expense=carry ing amount x 11% Carrying Balance d of Discount paid=3M x 8% = Int exp. Int paid 2,720,779. 89 240,000.00 240,000.00 240,000.00 1 2 3 4 240,000.00

On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8% maturing in 4 years. The interest is paid annually, and the market interest rate at the date of issue was 11%. What is the issue price of the bond? Prepare the 4 year amortization schedule for the bond. Perio Amortization Interest to be Interest Expense=carry ing amount x 11% Carrying Balance d of Discount paid=3M x 8% = Int exp. Int paid 2,720,779. 89 240,000.00 240,000.00 240,000.00 1 2 3 4 240,000.00

FINANCIAL ACCOUNTING
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, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8% maturing in 4 years. The interest is paid annually, and the market interest rate at the date of issue was 11%. What is the issue price of the bond? Prepare the 4 year amortization schedule for the bond. Perio Interest to Interest Expense=carry ing amount x 11% Amortization Carrying Balance d be of Discount paid=3M x 8% = Int exp. Int paid 2,720,779. 89 1 240,000.00 240,000.00 240,000.00 240,000.00 2 3 4
Transcribed Image Text:On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8% maturing in 4 years. The interest is paid annually, and the market interest rate at the date of issue was 11%. What is the issue price of the bond? Prepare the 4 year amortization schedule for the bond. Perio Interest to Interest Expense=carry ing amount x 11% Amortization Carrying Balance d be of Discount paid=3M x 8% = Int exp. Int paid 2,720,779. 89 1 240,000.00 240,000.00 240,000.00 240,000.00 2 3 4
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