Question

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olem 4 The Ruskin Corporation issues $20, 30 and December 31. The proceeds from expense for 2019 is on issues $20,000,000, 7.8%, 20 year bonds to yield 8% on January 1, 2017. Interest is paid on June The proceeds from the bonds are $19,604,144. Using straight-line amortization, the interest A. $1,540,208 B. $1,560,000 C. $1,569,192 D. $1,579,793 Problem 5 e Ryan Company issues $20,000,000, 7,8%. 20-year bonds to viold RX on January 1, 2017. Interest is paid on June 30 orld December 31. The proceeds from the bonds are $19.604 144. stralahtline amortization the carrying value of the bonds on December 31, 2019 is A. $19,940,624 B. $19,633,832 C. $19,670,232 D. $19,663,522 Problem 6 At the beginning of 2017, the Octo Company issued 10% bonds with a face value of $3,000,000. These bonds mature in the five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $2,779,200 to yield 12%. Octo uses a calendar-year reporting period. Using the effective-interest method of amortization amount of interest expense that should be reported for 2017 is A. $333,500 B. $344,160 C. $332,500 D. $334,510 Problem 7 On January 1, 2018, Rudy Inc. issued its 10% bonds in the face amount of $6,000,000, which mature on January 1, 2028. The bonds were issued for $6,810,000 to yield 8%, resulting in bond premium of $810,000. Rudy uses the effective interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2018, Rudy's adjusted unamortized bond premium should be which of the following? A. $810,000 B. $729,000 C. $754,800 D. $609,000

Answer 1

soly Int Expense ? 1420 $26,000,00 € anti-Expense ? | $2600,000 X 7.61 + [$1500 $20,00, do - $19664. ] lie Interest Expense o $1560000 + 19792.8 =1579792-8. le option D. to $1,579,793 opon 1: - taur value of Bend $2.6,00,000. Inti rate for Maturity 20 years Discount Amentised & [$20,00,0008 - $19604 149] 20 Discount for year $19792-80. for 3 years a $59378.40. Carrying value of Bond on 31 Deco Cool =[$19600144 + 59376-40] = $19,663,552 lie option D. 2019