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exis [7]
3 years ago
10

A company issues $24900000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The

proceeds from the bonds are $24324441. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2020 balance sheet
Business
1 answer:
m_a_m_a [10]3 years ago
3 0

Answer:

$24,353,219

Explanation:

The bond is issued on discount when the bond issuance proceeds are less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.

Discount on the bond = Face value - cash proceeds = $24,900,000 - $24,324,441 = $575,559

According to straight line amortization

Discount charged in the period = $575,559 / 20 = $28,778 per year = $14,389 per six months

Cash payment of interest = $24,900,000 x 5.8% = $1,444,200 per year = $722,100 per six months

As on December 31, 2020, one year has passed since the bond is issued. We will calculate annual interest expense

Total Interest Expense = $1,444,200 + $28,778 = $1,472,978

Bond Carrying value will be the net of bond book value and un-adjusted discount balance.

Carrying value of Bond = 24,900,000 - (575,559 - 28,778) = $24,353,219

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A population's size might alter due to the occurrence of new people or species. The total number of living things that are present in a given habitat is referred to as its population. The scenario indicates that there are now considerably more men in the population. The male butterflies in the population that survived earlier had a gene making them resistant to the parasite, and they passed the gene on to their offspring, leading to the number of males to be increased in the population.

This increase in the number of population growth of males can be explained by the fact that the male butterflies in the population that survived earlier had a gene making them resistant to the parasite, and they passed the gene to their offspring.

Learn to know more about Parasite on

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The given question is incomplete. The complete question is:

A few years ago the population of male blue moon butterflies on the island of Samoa declined. One hypothesis for the decline of the male butterflies is that a parasite-infected the cells of female butterflies. The parasite was passed to offspring through the females’ eggs and killed the male butterfly embryos. At one point during the decline, nearly all the butterflies in the population were females, but after five years the number of males in the population increased significantly.

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C. Male butterflies in the population that survived had a gene that made them resistant to the parasite, and they passed the gene on to their offspring.

D. Female butterflies in the population that survived were able to protect the male eggs from the parasite and provide extra care for the male offspring.

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