Required information On January 1, 2022, RMT Corp. issued 10-year, $100,000 bonds at par. The bonds make payments annually on December 31 at a stated fixed rate of interest of 9.0%. On January 1, 2022, RMT Corp. also entered into an interest rate swap. In this arrangement, RMT Corp. paid variable interest rates to a swap bank and in return, the swap bank paid fixed interest to RMT Corp. Interest rates during the first year of the interest rate swap were the following: Date January 1, 2022 December 31, 2022 Fixed rate 9.0% 9.0% Market rate 9.08 8.38 As a result of the change in interest rates, as of December 31, 2022 the bond liability had a fair value of $104,319 and the interest rate swap had a fair value of $4,319. Use the information above to answer the questions below. What amount would the company report as Bonds Payable in its December 31, 2022 balance sheet? Bonds Payable:
Required information On January 1, 2022, RMT Corp. issued 10-year, $100,000 bonds at par. The bonds make payments annually on December 31 at a stated fixed rate of interest of 9.0%. On January 1, 2022, RMT Corp. also entered into an interest rate swap. In this arrangement, RMT Corp. paid variable interest rates to a swap bank and in return, the swap bank paid fixed interest to RMT Corp. Interest rates during the first year of the interest rate swap were the following: Date January 1, 2022 December 31, 2022 Fixed rate 9.0% 9.0% Market rate 9.08 8.38 As a result of the change in interest rates, as of December 31, 2022 the bond liability had a fair value of $104,319 and the interest rate swap had a fair value of $4,319. Use the information above to answer the questions below. What amount would the company report as Bonds Payable in its December 31, 2022 balance sheet? Bonds Payable:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Munabhai
Transcribed Image Text:Required information
On January 1, 2022, RMT Corp. issued 10-year, $100,000 bonds at par. The bonds make payments annually on December
31 at a stated fixed rate of interest of 9.0%.
On January 1, 2022, RMT Corp. also entered into an interest rate swap. In this arrangement, RMT Corp. paid variable
interest rates to a swap bank and in return, the swap bank paid fixed interest to RMT Corp.
Interest rates during the first year of the interest rate swap were the following:
Date
January 1, 2022
December 31, 2022
Fixed rate
9.0%
9.0%
Market rate
9.08
8.38
As a result of the change in interest rates, as of December 31, 2022 the bond liability had a fair value of $104,319 and the
interest rate swap had a fair value of $4,319.
Use the information above to answer the questions below.
What amount would the company report as Bonds Payable in its December 31, 2022 balance sheet?
Bonds Payable:
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