On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds:
On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31.
The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The
partially completed amortization schedule below pertains to the bonds:
Date
January 1, Year 1
End of Year 1
End of Year 2
End of Year 3.
End of Year 4
Cash
Cash disbursed per period
Cash disbursed in total
$ 3,600
?
?
?
Interest
$ 3,417
?
?
3,376
Amortization
$ 183
?
210
?
Balance
$ 48,813
48,630
48,434
?
48,000
5. How much cash will be disbursed for interest each period and in total over the life of the bonds?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c804e19-c719-4121-8bdd-4a25baf766df%2F8d334970-d67d-40a5-b3db-3ecc24a4c2e5%2Fvfktfmt_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31.
The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The
partially completed amortization schedule below pertains to the bonds:
Date
January 1, Year 1
End of Year 1
End of Year 2
End of Year 3.
End of Year 4
Cash
Cash disbursed per period
Cash disbursed in total
$ 3,600
?
?
?
Interest
$ 3,417
?
?
3,376
Amortization
$ 183
?
210
?
Balance
$ 48,813
48,630
48,434
?
48,000
5. How much cash will be disbursed for interest each period and in total over the life of the bonds?
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