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Use the following information to answer all 10 questions:

On January 1,

2012, Buchholz Corporation issued bonds with a face value of $350,000 and stated interest of 5%. At the time of issuance, the market rate of interest was 4%. The bonds mature in 6 years. The bonds pay interest semi-annually on June 30 and December 31st of each year. Use the effective interest method.


(a) What is the issue price of the bonds?

(b) What is the carrying value of the bonds on December 31, 2015?

(c)How much interest expense will be recognized on June 30, 2014?

(d) How much interest expense will be reported on the income statement for the calendar year ended December 31, 2017?

Top Answer

(a) The issue price of bond is $368,508.875. (b) The carrying value on 31 st... View the full answer

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