Hooker Company sells $200,000 of ten year 8% bonds to yield 10% on January 1, 20
ID: 2727968 • Letter: H
Question
Hooker Company sells $200,000 of ten year 8% bonds to yield 10% on January 1, 2014. The bonds pay interest annually on December 31. In the following questions, use effective interest rate method. a. How much will Hooker finance by issuing the bonds? b. what is the bond carrying amount at the end of 2014? c. What is the bond interest expense for 2014? d. What is the amount of cash interest paid in 2014 on the bonds? e. What is the bond carrying value at the end of 2015? f. What is the amount of bond discount amortization for 2015? g. What is the amount of cash interest paid in 2015? h. What is the amount of bond interest expense for 2015?Explanation / Answer
SOLUTION A. 200000 B 186194 C 16000 D 16000 E 1,71,283.73 F 14,910.37 G 14,895.53 H 14,895.53
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