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# 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?

#### Solution Preview

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 ...

#### Solution Summary

The solution discusses accounting for Concord Inc. bonds.

\$2.49