Kalahari Limited
On January 2, Year 1, this company issued 1,000,000 10-year bonds for $1,150,000. The bonds pay interest on June 30 and December 31. The stated rate is 10% and the market rate is 8%. The company plans to use the effective interest method for amortizing bond discounts and premiums. Refer to the PV table on pages 717 to 720 of the text.
-Refer to the figure Kalahari Limited.What is the carrying value of the bonds after the first interest payment is made on June 30,Year 1?
A) $1,000,000
B) $1,142,400
C) $1,146,000
D) $1,154,000
Correct Answer:
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