On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96%....

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On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96%. Interest is payable annually on Decembe

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Answer 1

Answer #1

Answer :

A) Cash received : 183,350

B) Interest Expenses : 12,730

C) Carrying Value : 186,010

Face value of the Bond = $190,000

Issued at =0.965

Cash received = 190,000*0.965= $183,350

Discount on Bonds payable = 190,000-183,350 = 6,650

annula Amortization of Discount on Bonds Payable = $ 6,650 / 5 = 1,330

Cash Interest = 190,000*0.60 = 11,400

Interest Expenses = 11,400+1,330 =12,730

Carrying value on December 31 Years 2

Carrying value = 183,350+(1330*2) = 186,010

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Answer 2

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On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96%....

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On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96%....

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Add Answer to: On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96%....

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On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96%....