Question

A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2010.
Interest is paid on June 30 and December 31.
The proceeds from the bonds are $19,604,145.

Using effective-interest amortization, what will the carrying value of thebonds be on the December 31, 2010 balance sheet?

a.$19,612,643

b.$20,000,000

c.$19,625,125

d.$19,608,310

Answer 1

Answer

The answer and procedures of the exercise are attached in a microsoft excel document.  

a. $19,612,643

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.