Discount is amortized in the first year on the bonds term

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Reference no: EM131221954

1. A company issues a 10 year 7.5% $1 million dollar bond which pays interest semi-annually. The issue price is $966,024.18 Using the effective interest method, how much of the discount is amortized in the first year on the bonds term?

2. The Evermaster Co. issues at par a $100,000 8% bond on Jan. 1, 2010 which matures after 5 years. Bond issue costs are $7721.73 . The bond pays interest on July 1 and Jan 1. How much interest expense will be recognized under IFRS on July 1, 2010 ? (round to the nearest dollar, use effective interest method.)

Reference no: EM131221954

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