Question

The Cinci Company issues $100,000, 10% bonds at 103 on October 1, 2020. The bonds are

Answer 1

According to the given values in the question:

The Amortization period is:

= $8 \ years\times 12 \ months$

= $96 \ months$

Number of months of Amortization is:

= $3 \ months \ in \ 2020+(4 \ years\times 12 \ months)$

= $3+48$

= $51 \ months$

Now,

On bonds payable, the premium will be:

= $Issue \ price - Face \ value$

= $(100000\times 103 \ percent)- 100000$

= $103000-100000$

= $3000$ ($)

The Unamortized premium will be:

= $Premium - Unamortized \ premium$

= $3000-(3000\times \frac{51}{96} )$

= $3000-1593.75$

= $1406.25$ ($)

hence,

The carrying value as of December  31, 2024 will be:

= $100000+1406.25$

= $101406.25$ ($)

Learn more about the bond carrying value here:

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