On January 1, 2014, Tranche Corp. issued $750,000 of 8%, 10-year bonds, with annual interest payments on December 31. The bonds were issued for $657,831 yielding an effective-interest rate of 10%. Tranche Corp. uses the effective-interest method of amortization.
b. Determine the carrying value of the bonds on December 31, 2014.

Question

On January 1, 2014, Tranche Corp. issued $750,000 of 8%, 10-year bonds, with annual interest payments on December 31. The bonds were issued for $657,831 yielding an effective-interest rate of 10%. Tranche Corp. uses the effective-interest method of amortization.
  b. Determine the carrying value of the bonds on December 31, 2014.

Quizplus · Accepted Answer

The Answer of On January 1, 2014, Tranche Corp. issued $750,000 of 8%, 10-year bonds, with annual interest payments on December 31. The bonds were issued for $657,831 yielding an effective-interest rate of 10%. Tranche Corp. uses the effective-interest method of amortization.
  b. Determine the carrying value of the bonds on December 31, 2014.