bond amorization

bond amorization - c. What amount of interest expense will...

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Amortization of Bond Liability Professor: Dr. J.J. McMillan On January 1, X1 Jeffrey Corp issues $600,000 par value bonds with a 4-year maturity; 6 percent stated interest rate; and an effective interest rate of 8 percent. Interest is paid annually on December 31. a. The amount of cash Jeffrey Corp received on the issuance of these bonds was (circle correct choice below). 1. $ 600,000 (face value) 2. $ 560,255 (discount) 3. $ 641,579 (premium) b. Prepare an amortization table for the life of the bonds using the effective interest rate method.
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Unformatted text preview: c. What amount of interest expense will Jeffrey Corp report at the end of the second year? _______________ d. The total interest expense that Jeffrey Corp will recognize over the bonds life will be? _______________ e. The total amount of cash that Jeffrey Corp will pay out over the bonds life will be? ________________ f. If Jeffrey Corp decides to call & retire the bonds at the end of X3 for $602,000 it will report a gain/loss ? g. The amount reported in f. above will be? ______________....
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