Bonds issued at discount or premium
On 31 March 2014 Louis Company issued $20,000,000 face amount of 7%, 5-year bonds payable, with interest payable each 30 June and 31 December. The company received cash of $20,200,000, including the accrued interest from 31 December 2013. Louis uses the straight-line method of amortizing any discount or premium over the remaining life of the bonds - 57 months.
(a) What was the amount of accrued interest received by Louis on 31 March 2014 when the bonds were issued? (Do not assume the bonds were issued at par.)
$_______________
(b) What was the amount of discount or premium on the bonds at issuance date?
(Indicate discount or premium.)
$_______________
(c) What amount of cash is paid to bondholders for interest during year 2014?
$_______________
(d) What is Louis' total interest expense for year 2014 related to this bond issue?
$_______________
(e) What is the carrying amount of this bond issue as of 31 December 2014?
$_______________
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