Problem 14-78 Computing Selling Price and Bond Interest Revenue- Effective Interest and Straight-Line L01 Were the bonds sold at par, discount, or premium? Compute the purchase price of bonds Compute interest revenue for Year 1 Compute interest revenue for Year 2 On January 1 of Year 1, Olympians Inc. purchased for cash, ten $10,000 king pay 4% interest, payable on an annual basis each December 31, and mature in 10 years on December 31. The bonds are classified as held-to-maturity securities. The annual reporting period of Olympians Inc. ends Decem- ber 31. The following table includes five separate scenarios pertaining to these bonds. (1) Bonds Yield 4% (2) Bonds Yield 5% (Use effective interest method) (3) Bonds Yield 5% (Use straight-line interest method) (4) Bonds Yield 3% (Use effective interest method) (5) Bonds Yield 3% (Use straight-line interest method)
Problem 14-78 Computing Selling Price and Bond Interest Revenue- Effective Interest and Straight-Line L01 Were the bonds sold at par, discount, or premium? Compute the purchase price of bonds Compute interest revenue for Year 1 Compute interest revenue for Year 2 On January 1 of Year 1, Olympians Inc. purchased for cash, ten $10,000 king pay 4% interest, payable on an annual basis each December 31, and mature in 10 years on December 31. The bonds are classified as held-to-maturity securities. The annual reporting period of Olympians Inc. ends Decem- ber 31. The following table includes five separate scenarios pertaining to these bonds. (1) Bonds Yield 4% (2) Bonds Yield 5% (Use effective interest method) (3) Bonds Yield 5% (Use straight-line interest method) (4) Bonds Yield 3% (Use effective interest method) (5) Bonds Yield 3% (Use straight-line interest method)
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter11: Liabilities: Bonds Payable
Section: Chapter Questions
Problem 11.3BPR
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