On January 1, 20x1, Pitchfork Company issued a $750,000, 8%, 5-year bond for $860,401 andincurred debt issuance costs of $20,000. The bond pays interest annually every December 31st. Atof the date of issuance, the market rate was 6% APR. The adjusted market rate is 6.34%.What is the carrying value of the bond at December 31, 20x1, after the first interest payment hasbeen recorded? The company amortizes the discount and debt issuance costs using the effectiveinterest method.$830,825$833,682$838,682$840,401

On January 1, 20x1, Pitchfork Company issued a $750,000, 8%, 5-year bond for $860,401 and incurred debt issuance costs of $20,000. The bond pays interest annually every December 31st. At of the date of issuance, the market rate was 6% APR. The adjusted market rate is 6.34%.

On January 1, 20x1, Pitchfork Company issued a $750,000, 8%, 5-year bond for $860,401 and incurred debt issuance costs of $20,000. The bond pays interest annually every December 31st. At of the date of issuance, the market rate was 6% APR. The adjusted market rate is 6.34%.

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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