Homework Answers
| Price of zero coupon bond | Face value*Present value factor | |||
| $2,886,065 | 6500000*Present value factor | |||
| Present value factor | 2886065/6500000 | |||
| Present value factor | 0.4440 | |||
| In case of PV of $1 table and n is 7% 0.4440 would come under I of 7% | ||||
| Interest expense for 2021 | $202,025 | 2886065*7% | ||
| Bonds payable | Issue price+Accrued interest | |||
| Bonds payable | 2886065+202025 | |||
| Bonds payable | $3,088,090 | |||
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On January 1, 2021, Morton Sales Co. issued zero-coupon bonds with a face value of $6.5...
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