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Cardinals Company Financial Calculations

Cardinals Co issued $900,000 of 8%, 4-year bonds on 6/1/05 at {96} plus accrued interest. The bonds mature on 3/1/09, and pay interest each 3/1 and 9/1. The straight line method is used to amortize any discount or premium.

Compute the
1) amt of interest expense reported FYE 12/31/05
2) balance of the discount account at 12/31/05
3) carry value of the bond at 12/31/06

(CLUE: Carry Value on 12/31/07 must match $888,800.)

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