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Quatro Co. issues bonds dated January 1, 2019, with a par value of $710,000. The bonds’...

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Finance

Quatro Co. issues bonds dated January 1, 2019, with a par valueof $710,000. The bonds’ annual contract rate is 9%, and interest ispaid semiannually on June 30 and December 31. The bonds mature inthree years. The annual market rate at the date of issuance is 8%,and the bonds are sold for $728,598.

1. What is the amount of the premium on thesebonds at issuance?
2. How much total bond interest expense will berecognized over the life of these bonds?
3. Prepare an effective interest amortizationtable for these bonds.

  • Required 1
  • Required 2
  • Required 3

What is the amount of the premium on these bonds atissuance?

Premium
Total Bond Interest Expense Over theLife of the Bonds:
Amount repaid:
payments of
Par value at maturity
Total repaid
Less amount borrowed
Total bond interestexpense

repare an effective interest amortization table for these bonds.(Round all amounts to the nearest whole dollar.)

Semiannual Interest Period-EndCash Interest PaidBond Interest ExpensePremium AmortizationUnamortized PremiumCarrying Value
01/01/2019
06/30/2019
12/31/2019
06/30/2020
12/31/2020
06/30/2021
12/31/2021
Total
  • Required 2

Answer & Explanation Solved by verified expert
3.7 Ratings (325 Votes)
Answer 1Par Value 710000Issue Value 728598Premium on Bonds Issue Value    See Answer
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