Serenity Company issued $100,000 of 6%, 10-year bonds when the market rate of interest was...
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Accounting
Serenity Company issued $100,000 of 6%, 10-year bonds when the market rate of interest was 5%. The proceeds from this bond issue were $107,722. Using the effective interest rate method of amortization, which of the following statements is true? Assume that interest is paid annually.
a.Interest payments to bondholders each period will be $6,464.
b.Interest payments to bondholders each period will be $5,000.
c.Amortization of the premium for the first interest period will be $614.
d.Amortization of the premium for the first interest period will be $1,464.
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