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Calculate the proceeds of the bond reflecting the fact

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Reference no: EM132560231

A LTD. issued $80,000 of four year, 7% bonds dated 1 December 2018. Interest is payable semi-annually on 31 May and 30 November. The bonds were issued on 1 February 2019. The effective interest rate was 8$.

Required:

Question 1: Calculate the present value of the bond assuming that it had been issued on 1 December 2018

Question 2: Calculate the proceeds of the bond reflecting the fact that it was issued on 1 February 2019. Also calculate the accrued interest.

Question 3: Based on your calculation, how much amortization is included in interest expense for the period ended 31 May 2019?

Reference no: EM132560231

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