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lord [1]
3 years ago
10

On june 30, 20x1, after paying the semiannual interest due and recording amortization of bond discount, hake redeemed its 15-yea

r, 8% $1,000,000 par bonds at 102. hake has a policy to redeem bonds when it is advantageous to do so. the bonds, which had a carrying amount of $940,000 on january 1, 20x1, had originally been issued to yield 10%. hake used the effective interest method of amortization and paid interest and recorded amortization on june 30. compute the amount of gain or loss on the redemption of the bonds.
Business
1 answer:
Leokris [45]3 years ago
6 0

Amount of interest expense on 30th June 20X1= Carrying Amount of Bond*Effective Interest Rate (For 6 Months)

=$940000*5/100

=$47000

Contractual Interest of the bond=Face Value*Contractual Interest

=1000000*4/100

=$40000

Thus, Carrying Amount of Bond=Carrying Amount|+Interest Expense-Interest Paid

Carrying Amount as on 30th June=940000+47000-40000

Carrying amount as on 30th June=$947000

Amount Paid to Redeem Bonds =$1020000

Gain/(Loss) on Redemtion of Bonds=Face Value-Amount Paid to Redeem Bonds

Loss on Bonds=-$73000

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Explanation:

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Honest Tea's mission statement is "Honest Tea seeks to create and promote great-tasting, organic beverages. We strive to grow ou
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b Sense-of-mission marketing

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Grossnickle Corporation issued 20-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000 one year ago. Today,
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Answer:

correct option is e.  $1,232.15

Explanation:

given data

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NPER = 19 years

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solution

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so  here PMT is

PMT = Future value  × annual coupon bonds   ................1

put here value

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The formula we use in excel =  -PV(Rate,NPER,PMT,FV,type)

so we will get here

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correct option is e.  $1,232.15

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