Assuming that Auerbach issued the bonds for $255,369,000, what would the company report for its net bond liability balance after its first interest payment on March 31, 2014, rounded up to the nearest thousand?
A)$252,369,000.
B)$256,369,000.
C)$256,300,000.
D)$257,030,000.

Question

Quizplus · Accepted Answer

The net bond liability balance after the first interest payment can be calculated as follows:
Bond liability = $255,369,000
Less: First interest payment on $255,369,000 bond liability (5.8% of $255,369,000) = $14,790,102
Net bond liability after first interest payment = $255,369,000 - $14,790,102 = $240,578,898
Rounded up to the nearest thousand, the net bond liability balance is $257,030,000 (D).

Assuming That Auerbach Issued the Bonds for $255,369,000, What Would