Answer:
a) Cash received = $183,350
b) Interest expense = $12,730
c) Carrying value = $186,010
Explanation:
As per the data given in the question,
a) Face value of bond = $190,000
Issued at =0.965
Cash received = $190,000 × 0.965
= $183,350
b) Discount on bonds payable = $190,000 - $183,350
=$6,650
Annual amortization of discount on bonds payable =$6,650÷5
= $1,330
Cash interest = $190,000×0.60
= $11,400
Interest expenses = $11,400+$1,330
= $12,730
c)
carrying value = $183,350 + ($1,330 × 2)
= $186,010
