![Problem 10-231 [LO 10-S2] Bonds with a stated interest rate of 9% and a face value totaling $250,000 were issued for $262,500](http://img.homeworklib.com/questions/fecac6d0-40cd-11ea-8207-ffeec6f153cc.png?x-oss-process=image/resize,w_560)
Homework Answers
Answer
- Carrying Value = Face Value + Unamortised Premium OR – Unamortised Discounts.
- Premium = $ 262500 – 250000 = $ 12,500
- Interest Expense for 2018 = $ 262500 x 8% = $ 21,000
- Cash Interest = $ 250000 x 9% = $ 22,500
- Premium amortised in 2018 = $ 22500 – 21000 = $ 1500
- Unamortised Premium = $ 12500 – 1500 = $ 11,000
- Carrying
Value
= $ 250000 + 11000
= $ 261,000 Answer
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