Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $85,431. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds.
Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $85,431. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 7C
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![Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract rate is 8%, and interest is
paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is
10%, and the bonds are sold for $85,431.
1. What is the amount of the discount on these bonds at issuance?
2. How much total bond interest expense will be recognized over the life of these bonds?
3. Prepare a straight-line amortization table for these bonds.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
How much total bond interest expense will be recognized over the life of these bonds?
Total Bond Interest Expense Over Life of Bonds:
Amount repaid:
payments of
Par value at maturity
Total repaid
Less amount borrowed
Total bond interest expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F938b121a-3035-421e-8821-7ef0f56c68ed%2F0450570a-7e81-4cae-a283-e76e138b711f%2F73uslc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract rate is 8%, and interest is
paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is
10%, and the bonds are sold for $85,431.
1. What is the amount of the discount on these bonds at issuance?
2. How much total bond interest expense will be recognized over the life of these bonds?
3. Prepare a straight-line amortization table for these bonds.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
How much total bond interest expense will be recognized over the life of these bonds?
Total Bond Interest Expense Over Life of Bonds:
Amount repaid:
payments of
Par value at maturity
Total repaid
Less amount borrowed
Total bond interest expense
![Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract rate is 8%, and interest is
paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is
10%, and the bonds are sold for $85,431.
1. What is the amount of the discount on these bonds at issuance?
2. How much total bond interest expense will be recognized over the life of these bonds?
3. Prepare a straight-line amortization table for these bonds.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Prepare a straight-line amortization table for these bonds.
Note: Round your intermediate calculations to the nearest dollar amount.
(0)
(1)
(2)
(3)
(4)
(5)
(6)
Semiannual Period-End
01/01/2021
06/30/2021
12/31/2021
06/30/2022
12/31/2022
06/30/2023
12/31/2023
Unamortized
Discount
Carrying Value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F938b121a-3035-421e-8821-7ef0f56c68ed%2F0450570a-7e81-4cae-a283-e76e138b711f%2Frk5ldr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract rate is 8%, and interest is
paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is
10%, and the bonds are sold for $85,431.
1. What is the amount of the discount on these bonds at issuance?
2. How much total bond interest expense will be recognized over the life of these bonds?
3. Prepare a straight-line amortization table for these bonds.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Prepare a straight-line amortization table for these bonds.
Note: Round your intermediate calculations to the nearest dollar amount.
(0)
(1)
(2)
(3)
(4)
(5)
(6)
Semiannual Period-End
01/01/2021
06/30/2021
12/31/2021
06/30/2022
12/31/2022
06/30/2023
12/31/2023
Unamortized
Discount
Carrying Value
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