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1 year ago

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Business

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aksik [14]1 year ago

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The answers are:

Book Value of the Bond on December 31 this year = $140,000
Book Value of the Bond on December 31 next year = $140,000

Calculation of the amount of interest expense should be recorded on June 30 and December 31 of this year

Semiannual Interest Rate = Annual Coupon Rate / 2 = 7.5% / 2 = 3.75%

Amount of Semiannual Interest Rate = $140,000 x 3.75% = $5,250

The interest expense should be recorded on June 30 and December 31 of this year is $5,250

The amount of cash is owed to investors on June 30 and December 31 of this year

In this question, cash owed to the investor is the same as the amount paid as interest, so

cash owed to the investor on June 30 = $5,250

Dec 31 = $5,250

Calculation of book value of the bonds on December 31 of this year and December 31 of next year

Book Value as of Year-End = Face Value + Unamortized Premium

= Face Value - Unamortized Discount

Book Value of the Bond on December 31 this year = $140,000

Book Value of the Bond on December 31 next year = $140,000.

Learn more about interest here: brainly.com/question/24924853

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