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TB PR Qu. 9-225 (Static) Astro World Issues $20 million In bonds on... Astro World issues $20 million in bonds on January 1, 2024 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: (1) Date (2) Cash Paid (3) Interest Expense 1/1/2024 6/30/2024 12/31/2024 600,000 600,000 625,257 626,141 (4) Increase in Carrying Value 25,257 26,141 (5) Carrying Value $ 17,864,493 17,889,750 17,915,891 Required: 1. Were the bonds issued at face amount, a discount, or a premium? 2. What is the original issue price of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 3. What is the face amount of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 4. What is the stated annual interest rate? 5. What is the market annual interest rate? 6. What is the total cash paid for interest assuming the bonds mature in 20 years? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000))

TB PR Qu. 9-225 (Static) Astro World Issues $20 million In bonds on... Astro World issues $20 million in bonds on January 1, 2024 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: (1) Date (2) Cash Paid (3) Interest Expense 1/1/2024 6/30/2024 12/31/2024 600,000 600,000 625,257 626,141 (4) Increase in Carrying Value 25,257 26,141 (5) Carrying Value $ 17,864,493 17,889,750 17,915,891 Required: 1. Were the bonds issued at face amount, a discount, or a premium? 2. What is the original issue price of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 3. What is the face amount of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 4. What is the stated annual interest rate? 5. What is the market annual interest rate? 6. What is the total cash paid for interest assuming the bonds mature in 20 years? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000))

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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TB PR Qu. 9-225 (Static) Astro World Issues $20 million in bonds on... Astro World issues $20 million in bonds on January 1, 2024 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: (1) Date (2) Cash Paid (3) Interest Expense 1/1/2024 6/30/2024 12/31/2024 600,000 600,000 625,257 626,141 1. The bonds were issued at 2. Issue price 3. Face amount Required: 1. Were the bonds issued at face amount, a discount, or a premium? 2. What is the original issue price of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 3. What is the face amount of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 4. What is the stated annual interest rate? Answer is complete but not entirely correct. 4. Stated annual interest rate 5. Market annual interest rate 6. Total cash interest 5. What is the market annual interest rate? 6. What is the total cash paid for interest assuming the bonds mature in 20 years? (Enter your answer in dollars, not milllons. (l.e., $5.5 million should be entered as 5,500,000)) A Discount $ S S (4) Increase in Carrying Value 17,864,493 20,000,000 25,257 26,141 7X% 7✔ % 56,000 X (5) Carrying Value $ 17,864,493 17,889,750 17,915,891
Transcribed Image Text:TB PR Qu. 9-225 (Static) Astro World Issues $20 million in bonds on... Astro World issues $20 million in bonds on January 1, 2024 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: (1) Date (2) Cash Paid (3) Interest Expense 1/1/2024 6/30/2024 12/31/2024 600,000 600,000 625,257 626,141 1. The bonds were issued at 2. Issue price 3. Face amount Required: 1. Were the bonds issued at face amount, a discount, or a premium? 2. What is the original issue price of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 3. What is the face amount of the bonds? (Enter your answer in dollars, not millions. (l.e., $5.5 million should be entered as 5,500,000)) 4. What is the stated annual interest rate? Answer is complete but not entirely correct. 4. Stated annual interest rate 5. Market annual interest rate 6. Total cash interest 5. What is the market annual interest rate? 6. What is the total cash paid for interest assuming the bonds mature in 20 years? (Enter your answer in dollars, not milllons. (l.e., $5.5 million should be entered as 5,500,000)) A Discount $ S S (4) Increase in Carrying Value 17,864,493 20,000,000 25,257 26,141 7X% 7✔ % 56,000 X (5) Carrying Value $ 17,864,493 17,889,750 17,915,891
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