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Calculate amount of interest paid in cash payment period

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Reference no: EM132487396

Otter Products Inc. issued bonds on January 1, 2019. Interest is to be paid semi-annually. Other information is as follows:

Term in years: 2

Face value of bonds issued: $200,000

Issue price: $206,000

Specified interest rate each payment period: 6%

Calculate:

Question a. The amount of interest paid in cash every payment period.

Question b. The amount of amortization to be recorded at each interest payment date (use the straight-line method).

  • amortization table by calculating interest expense, and beginning and ending bond carrying amounts at the end of each period over three years.

Reference no: EM132487396

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