On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the second interest payment is:

Question

31-07-2019
Business

contestada

On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the second interest payment is:

Respuesta :

Otras preguntas

A loop of wire lies flat on the horizontal surface in an area with uniform magnetic field directed vertically up. The loop of wire suddenly contracts to half of

Given the following exponential function, identify whether the change represents growth or decay, and determine the percentage rate of increase or decrease. y =

Andrew writes the algebraic expression 2s + 2.79 to represent the cost of his lunch. He bought 2 sandwiches and a large drink. Identify any variables, coefficie

Why does Maria write the Valentine's Day message for Danny with her left hand? Support your inference with evidence from the text. Answer

Which of the following statements are true about malaria in Africa? i. 500 million people in Africa are infected with malaria. ii. Most of the people who die of

A 159.0L sample of O2 gas is collected at 2.20 atm and 45C. If the temperature remains constant, what volume will the gas occupy if the pressure is decreased to

Line A has a slope of 3/2 and passes through the poin (3,3). Line B has a slope of -1/3 and passes through the point (-4,-2). At what point does line A intersec

Brian bought 3 T-shirts that normally cost $16.00 each. They were on sale for $11.99 each. A. How much did Brian spend? B. How much did he save?

An arrow is fired at a target on a high wall. How does the energy change between the moment the arrow is fired and the moment it hits the target

Find the inner product for (7, 2) * (0, -2) and state whether the vectors are perpendicular. a. -4; no b. -4; yes c. 4; no d. 4; yes

ACCESS MORE

valetta valetta · Answer 1 · 2019-08-12T06:58:16+02:00

Answer:

$ 396400

Explanation:

Given data:

Sale value of the bond = $ 396000

Discount offered = $ 400000 - $ 396000 = $ 4000

Amount of discount amortized per semiannual = $ 4000/20 = $ 200

Now,

The carrying value of the bonds immediately after the second payment = sale value + 2 (Amount of discount amortized per semiannual)

or

The carrying value of the bonds immediately after the second payment = $ 396000 + 2 ($ 200)

or

The carrying value of the bonds immediately after the second payment = $ 396400

tifanihayyu tifanihayyu · Answer 2 · 2019-09-16T20:45:47+02:00

The carrying value of the bonds immediately after the second interest payment is $ 396,400

Further explanation

On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount.

The carrying value of the bonds immediately after the first interest payment is

Cash = $ 400,000 * 7% * [tex]\frac{1}{2}[/tex] = $14,000.

Total discount $400,000 - $396,000 = $4,000

Amortization of bond discount = $ [tex]\frac{4,000 }{ 20 }[/tex]= $200

Interest expense = $14,000 + $200 = $14,200

Debit bond Interest expense $14,200

Credit cash $14,000

Discount on B/P $200

The carrying value of the bonds immediately after the second interest payment is

The carrying value of the bonds immediately after the second payment = sale value + 2 (Amount of discount amortized per semiannual) = $ 396,000 + 2 * ($ 200) = $ 396,400

The carrying value of the bonds immediately after the second interest payment is $ 396,400

Learn more

Learn more about The carrying value of the bonds https://brainly.com/question/4603544
Learn more about the straight-line method https://brainly.com/question/4378341
Learn more about the second interest payment https://brainly.com/question/12856559

Answer details

Grade: 9

Subject: business

Chapter: The carrying value of the bonds

Keywords: The carrying value of the bonds, the straight-line method, the second interest payment, bond, discount