Accounting for Concord Inc. Bonds
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Concord Inc. issues (sells) $100,000 of its 10-year, 8% bonds to yield 10% on January 1, Year 1. The bonds pay interest annually on December 31. The bonds were sold with a discount of $12,289. What is the bond carrying amount (book value) at the end of Year 1?
Concord Inc. issues (sells) $100,000 of its 10-year, 8% bonds to yield 10% on January 1, Year 1. The bonds pay interest annually on December 31. The bonds were sold with a discount of $12,289. What is the bond interest expense for Year 1?
Concord Inc. issues (sells) $100,000 of its 10-year, 8% bonds to yield 10% on January 1, Year 1. The bonds pay interest annually on December 31. The bonds were sold with a discount of $12,289. What is the amount of cash interest paid on the bonds in Year 1?
Concord Inc. issues (sells) $100,000 of its 10-year, 8% bonds to yield 10% on January 1, Year 1. The bonds pay interest annually on December 31. The bonds were sold with a discount of $12,289. What is the amount of bond discount amortization for Year 2?
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Solution Summary
The solution discusses accounting for Concord Inc. bonds.
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See attached Excel file.
Year Bond carrying value, beginning Cash payment Interest expense Bond discount amortization Amortization balance Bond carrying value, ending
0 $12,289 $87,711
1 $87,711 $8,000 $8,771 $771 $11,518 $88,482
2 ...
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