Reference no: EM13827299
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense
Evans Co. produces and sells motorcycle parts. On the first day of its fiscal year, Evans Co. issued $30,000,000 of four-year, 12% bonds at a market (effective) interest rate of 10%, with interest payable semi annually. Compute the following:
a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 4 and Exhibit 5. Round to the nearest dollar.
$
b. The amount of premium to be amortized for the first semi annual interest payment period, using the interest method. Round to the nearest dollar.
$
c. The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar.
$
d. The amount of the bond interest expense for the first year. Round to the nearest dollar.
$
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