6 On January 1, 2018, Solis Co. issued its 10% bonds in the face amount of...
6 On January 1, 2018, Solis Co. issued its 10% bonds in the face amount of $4,000,000,
which mature on January 1, 2028. The bonds were issued for $3,100,000 to yield 8%, resulting in bond discount of $900,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31.
- What is the amount of Solis's adjusted unamortized bond premium at December 31, 2019?
Homework Answers
Answer is as follows:
=$900,000-[(4,000,000 x 0.10)-($3,100,000 x 0.08)]
=$900,000-[400,000-2,48,15000]
=$900,000-152,000
=7,48,000
Answer is 7,48,000
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