Enviro company issues 8 10 year bonds with a par value

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Reference no: EM13614017

Enviro Company issues 8%, 10 year bonds with a par value of$250,000 and semiannual interest payments. On the issue date , theannual market rate for these bonds is 10%, which implies a sellingprice of 87 1/2. The straight-line method is used to allocateinterest expense.

1. What are the issuer's cash proceeds from the issurance ofthese bonds?

2. What total amount of bond interest expense will berecognized over the life of these bonds?

3. What is the amount of bond interest expense recorded on thefirst interest payment date?

Reference no: EM13614017

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