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AlladinOne [14]
3 years ago
8

On June 1, Greendale Corp. issued $700,000, five-year bonds at 8%, with interest payable annually on May 31. The bonds sold for

$728,700 when the market rate of interest was 7%. Greendale uses the effective interest method for amortizing premiums on bonds payable. What is the balance of the premiums on bonds payable account immediately following the first interest payment?
Business
1 answer:
elena-14-01-66 [18.8K]3 years ago
5 0

Answer:

$23,709

Explanation:

Data provided in the question:

Amount of bond issued = $700,000

Duration = 5 years

Interest rate = 8%

Selling amount of bond = $728,700

Market rate of interest = 7%

Now,

Interest paid = Amount of bond issued × Interest rate

= $700,000 × 0.08

= $56,000

Interest expense = Amount of bond sold × Market Interest rate

= $728,700 × 0.07

= $51,009

unamortized premium = Selling amount of bond -  Amount of bond issued

= $728,700 - $700,000

= $28,700

Amortized amount = Interest paid - Interest expense

= $56,000 - $50,009

= $4,991

Balance  of the premiums on bonds payable account immediately following the first interest payment

= unamortized premium - Amortized amount

= $28,700 - $4,991

= $23,709

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Answer:

I don't know

Explanation:

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A computer company had $3,000,000 in research and development costs. Before recording these costs, the net income of the company
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Answer:

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Explanation:

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7 0
3 years ago
if aggregate demand is growing faster than long run aggregate supply, the federal reserve is most likely to
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Answer:

.sell securities on the open market

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5 0
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Brrunno [24]

The average gross income for domestic movies (in mln) is 180

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Learn more about Domestic movies here: brainly.com/question/25731424

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5 0
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erica [24]

Answer:

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