Question: On January 1 of Year 1, Congo Express Airways issued $3, 650, 000 of 8% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3, 350, 000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized at a rate of $10,000 every six months. The company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of: a. $3, 224, 000. b. $3,516,000. C 83,030,000. d. $3,370,000 81,076, 000.
Question: On January 1 of Year 1, Congo Express Airways issued $3, 650, 000 of 8% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3, 350, 000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized at a rate of $10,000 every six months. The company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of: a. $3, 224, 000. b. $3,516,000. C 83,030,000. d. $3,370,000 81,076, 000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question:
On January 1 of Year 1, Congo Express Airways issued $3, 650, 000 of 8% bonds that pay interest semiannually on January 1 and
July 1. The bond issue price is $3, 350, 000 and the market rate of interest for similar bonds is 9%. The bond premium or discount
is being amortized at a rate of $10, 000 every six months. The company's December 31, Year 1 balance sheet should reflect total
habilities assOciated with the bond issue in the amount of:
a. $3, 224, 000
b. $3,516,000.
c. 83.930,000.
d. $3,370,000
$4,076,000
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