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Prepare an effective interest amortization table for bonds

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Reference no: EM133170125

Question - Stanford issues bonds dated January 1, 2021, with a par value of $254.000. The bonds' annual contract rate is 8%, and interest is paid semi-annually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $241,104.

Required -

1. What is the amount of the discount on these bonds at issuance?

2. How much total bond interest expense will be recognized over the life of these bonds?

3. Prepare an effective interest amortization table for these bonds.

Reference no: EM133170125

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