San Jose Company issued five-year 8% bonds with a face value of $100,000,for $107,023.58 on January 1,2016 when the market (effective)rate of interest was 7%.The bonds pay annual interest each December 31.San Jose uses the effective interest method for amortization of premium or discount on bonds payable.(Round your answers to two decimal places. )
Required:
a)What is the annual amount of cash that San Jose will pay to bondholders for interest?
b)What amount of interest expense and premium amortization should San Jose recognize for 2016? What is the carrying amount of the liability on December 31,2016?
c)What amount of interest expense and premium amortization should San Jose recognize for 2017? What is the carrying amount of the liability on December 31,2017?
d)What is the total amount of interest that San Jose will record in interest expense over the life of the bond?

Question

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The Answer of San Jose Company issued five-year 8% bonds with a face value of $100,000,for $107,023.58 on January 1,2016 when the market (effective)rate of interest was 7%.The bonds pay annual interest each December 31.San Jose uses the effective interest method for amortization of premium or discount on bonds payable.(Round your answers to two decimal places. )
Required:
a)What is the annual amount of cash that San Jose will pay to bondholders for interest?
b)What amount of interest expense and premium amortization should San Jose recognize for 2016? What is the carrying amount of the liability on December 31,2016?
c)What amount of interest expense and premium amortization should San Jose recognize for 2017? What is the carrying amount of the liability on December 31,2017?
d)What is the total amount of interest that San Jose will record in interest expense over the life of the bond?

San Jose Company Issued Five-Year 8% Bonds with a Face