Effective Interest Amortization in a Company
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A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2007. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,145. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2007 balance sheet be?
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Solution Summary
This solution provides calculations for the carrying value of bonds using effective-interest amortization.
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Interest paid on 30 June 2007=20000000*7.8%/2=780,000
Interest Expenses = ...
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