Answer:
A) Interest Expense is $577.6
B) $9683
Explanation:
Given data:
Issued amount $10,000 at 9%
a.
Interest Expense = $9,621 × 6%
= $577.6
Interest Expense is $577.6
b.
The book value of the bonds as of December 31, 2016 is calculated in excel and screen shot provided below:
par value of bond is $10,000
coupon rate 9%
Annual coupon payment
time of year remaining 5 year
YTM 10%
INTEREST expense for 2016
Ammortization of bond discount = 962 - 900 = 62
Book value of bond on 31 dec 2016 = 9621 + 62 = $9683