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Posted by: Homeworkhelp
Price Quoted by Student: $5
Posted On: 2011-03-07 02:02:23
 
Question

Prairie Dunes Company issues bonds dated January 1, 2004, with a par value of $800,000.

 

Exercise 14-4 Straight-line amortization of bond premium

 

ANSWER KEY Exercise 14-4 Prairie Dunes Company issues bonds dated January 1, 2004, with a par value of $800,000.

 

Fundamental Accounting Principles, 7th Ed Larson Wild Chiappetta

 

Exercise 14-4 Prairie Dunes Company issues bonds dated January 1, 2004, with a par value of $800,000. The annual contract rate is 13%, 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 12%, and the bonds are sold for $819,700.

1. What is the amount of the premium on these bonds at issuance?

2. How much total bond interest expense will be recognized over the life of these bonds?

3. Prepare an amortization table like the one in Exhibit 14.11 for these bonds; use the straight-line method to amortize the premium.


Solutions
ANSWER KEY Exercise 14-4 Prairie Dunes Company iss
Price $5
Attachment 1: E 14-4 Prairie Dunes Company.doc
Solution Posted By: Homeworkhelp    Posted on: 07-03-2011