Reference no: EM132489285
Question -
(a) Ivanhoe Co. sold $2,150,000 of 12%, 10-year bonds at 106 on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on July 1 and January 1. If Ivanhoe uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2017, and December 31, 2017. (Round answer to 0 decimal places, e.g. 38,548.)
(b) Shamrock Inc. issued $630,000 of 8%, 10-year bonds on June 30, 2017, for $485,476. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Shamrock uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2017.
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