Premium and Discount of a Bond or Debenture Evans & Sons, Inc. reported the following borrowings in a prior annual report: Effective Interest Borrrowing ($ in millions) a. 4.00 percent, zero-coupon bond, due 2020 Amount Rate (%) $202 4.00 b. 4.80 percent debentures, due 2033 500 5.00 c. 3.80 percent debentures, due 2017 d. 6.95 percent bonds, due 2025 500 3.95 293 6.85 For each borrowing, indicate whether the bond or debenture was originally sold at its face value, a discount, or a premium. a. b. C. d.

Premium and Discount of a Bond or Debenture Evans & Sons, Inc. reported the following borrowings in a prior annual report: Effective Interest Borrrowing ($ in millions) a. 4.00 percent, zero-coupon bond, due 2020 Amount Rate (%) $202 4.00 b. 4.80 percent debentures, due 2033 500 5.00 c. 3.80 percent debentures, due 2017 d. 6.95 percent bonds, due 2025 500 3.95 293 6.85 For each borrowing, indicate whether the bond or debenture was originally sold at its face value, a discount, or a premium. a. b. C. d.

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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