Tina's Wear issued 10-year bonds with a face value of $50,000.The bonds carry a 7% stated interest rate and pay interest once a year.They were issued when the market interest rate was 8% and sold for $46,644.78.
Required:
a.Complete the amortization schedule for the first two years of the bond issue using the effective interest method.
b.Put an X in the appropriate box to describe how each of these items will behave with each additional interest payment:
c.Fill in the correct dollar amounts:
At maturity,after the last interest payment has been made,the unamortized discount on the bonds will be $________ and the carrying value of the bonds will be $________.

Question

Tina's Wear issued 10-year bonds with a face value of $50,000.The bonds carry a 7% stated interest rate and pay interest once a year.They were issued when the market interest rate was 8% and sold for $46,644.78.
Required:
a.Complete the amortization schedule for the first two years of the bond issue using the effective interest method.
  b.Put an X in the appropriate box to describe how each of these items will behave with each additional interest payment:
  c.Fill in the correct dollar amounts:
At maturity,after the last interest payment has been made,the unamortized discount on the bonds will be $________ and the carrying value of the bonds will be $________.

Quizplus · Accepted Answer

The Answer of Tina's Wear issued 10-year bonds with a face value of $50,000.The bonds carry a 7% stated interest rate and pay interest once a year.They were issued when the market interest rate was 8% and sold for $46,644.78.
Required:
a.Complete the amortization schedule for the first two years of the bond issue using the effective interest method.
  b.Put an X in the appropriate box to describe how each of these items will behave with each additional interest payment:
  c.Fill in the correct dollar amounts:
At maturity,after the last interest payment has been made,the unamortized discount on the bonds will be $________ and the carrying value of the bonds will be $________.

Tina's Wear Issued 10-Year Bonds with a Face Value of $50,000.The