On January 1, of the current year, Colour Inc. issued bonds with a face value...
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Accounting
On January 1, of the current year, Colour Inc. issued bonds with a face value of $500,000. The bonds pay interest annually and mature in 10 years. The bonds have a stated interest rate of 6%. The market rate on the date of issue was 4%.
1. Compute the issue price of the bonds
2. What will the carrying value of the bond be at maturity?
3. What will be the total amount of interest expense recognized over the life of the bonds? (Note- you do not need to do an amortization schedule to answer this question.)
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