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Untitled Document26 - using the bond-related payments and...

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The $9,377 is called the  carrying amount  of the bond. The discount on bonds  payable is the difference between the cash received and the maturity value of the  bonds and represents additional interest expense to Lighting Process, Inc. (the  company that issued the bond). The total interest expense can be calculated 
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Unformatted text preview: using the bond-related payments and receipts as shown: Repayments Principal $10,000 Interest ($450 times 20 semiannual periods) 9,000 Total cash payments to investors 19,000 Less: Cash receipts from investors (9,377 ) Total interest expense $ 9,623...
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This note was uploaded on 12/25/2011 for the course FIN 3312 taught by Professor Staff during the Spring '08 term at Texas State.

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