Question

Hopkins Ltd. issued five-year bonds with a face value of $160,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 7% when the bonds were issued at a price of 97. Your answer is correct Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds 155200 LINK TO TEXT Your answer is correct. Determine the interest expense recorded for the six months ending June 30 when the first interest payment is made. Interest expense 5432 LINK TΟ ΤΕXΤ Your answer is incorrect. Try again Determine the balance in the Bonds Payable account immediately following the first interest payment. Balance in bonds payable account

Answer 1

Solution Given data, a) face value. &. 160000 Coupon ute % annus) 3). annual Masset interest rate = 7% annual 3-52. Semi annual proceeds received when bonds issed - face value o .990 . - 1600m x0.97 155200 = (6) Interest expense at Jeme 30 = Bond proceeds7 markersterk (C) = 1552004 73 X 6118 a & su32 Discount amortized at first semi annuel period • 5432 - (160600x 62 x 6712) $632 Balance in band payable account = $155200 +8632 = $ 155832