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Eagle Corporation issued $9,950,000, 6 percent bonds dated April 1, year 1. The market interest rate was 7 percent, with interest paid each March 31. The bonds mature in three years, on March 31, year 4. Eagle's fiscal year ends on December 31. Use Table 8C1. Table BC.2. Required: 1. What was the issue price of these bonds? (Round time value factor to 4 decimal places. Round the final answer to the nearest whole dollar.) Answer is complete but not entirely correct. Bond issue price $ 9,688,8811

Eagle Corporation issued $9,950,000, 6 percent bonds dated April 1, year 1. The market interest rate was 7 percent, with interest paid each March 31. The bonds mature in three years, on March 31, year 4. Eagle's fiscal year ends on December 31. Use Table 8C1. Table BC.2. Required: 1. What was the issue price of these bonds? (Round time value factor to 4 decimal places. Round the final answer to the nearest whole dollar.) Answer is complete but not entirely correct. Bond issue price $ 9,688,8811

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 15MCQ
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Eagle Corporation issued $9,950,000, 6 percent bonds dated April 1, year 1. The market interest rate was 7 percent, with interest paid each March 31. The bonds mature in three years, on March 31, year 4. Eagle's fiscal year ends on December 31. Use Table 8C1, Table BC.2. Required: 1. What was the issue price of these bonds? (Round time value factor to 4 decimal places. Round the final answer to the nearest whole dollar.) Answer is complete but not entirely correct. Bond issue price $ 9,688,881 2. Compute the interest expense for the period ended December 31, year 1. The company uses the effective-interest method of amortization. (Round time value factor to 4 decimal places. Round intermediate and final answer to the nearest whole dollar.) Answer is complete and correct. Interest expense $ 508,666 3. Show how the bonds should be reported on the statement of financial position at December 31, year 1. (Round intermediate and final answer to the nearest whole dollar.) Answer is complete but not entirely correct. EAGLE CORPORATION As of December 31, Year 1 Statement of financial position: Bonds payable 10,197,547 4-a. What amount of interest expense will be recorded on March 31, year 2? (Round time value factor to 4 decimal places. Round the final answer to the nearest dollar amount.) Answer is complete but not entirely correct. Interest expense 713,828 4-b. Is this amount different from the amount of cash that is paid? Yes No
Transcribed Image Text:Eagle Corporation issued $9,950,000, 6 percent bonds dated April 1, year 1. The market interest rate was 7 percent, with interest paid each March 31. The bonds mature in three years, on March 31, year 4. Eagle's fiscal year ends on December 31. Use Table 8C1, Table BC.2. Required: 1. What was the issue price of these bonds? (Round time value factor to 4 decimal places. Round the final answer to the nearest whole dollar.) Answer is complete but not entirely correct. Bond issue price $ 9,688,881 2. Compute the interest expense for the period ended December 31, year 1. The company uses the effective-interest method of amortization. (Round time value factor to 4 decimal places. Round intermediate and final answer to the nearest whole dollar.) Answer is complete and correct. Interest expense $ 508,666 3. Show how the bonds should be reported on the statement of financial position at December 31, year 1. (Round intermediate and final answer to the nearest whole dollar.) Answer is complete but not entirely correct. EAGLE CORPORATION As of December 31, Year 1 Statement of financial position: Bonds payable 10,197,547 4-a. What amount of interest expense will be recorded on March 31, year 2? (Round time value factor to 4 decimal places. Round the final answer to the nearest dollar amount.) Answer is complete but not entirely correct. Interest expense 713,828 4-b. Is this amount different from the amount of cash that is paid? Yes No
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