What amortization of the bond premium or discount on period

Assignment Help Financial Accounting
Reference no: EM132762860

On January 2012, Lower Under Co announced an offer to issue bonds with a $200,000 par value, a 10% annual contract rate with interest payable semi-annually, and with a three-year life to gain some liquidity given the current market conditions. Interest payments are due on April 1 and October 1 of each year. Lower Under agrees to make six payments over the three years of the bond. Bonds are issue on April 1st 2012, maturity date is April 1, 2015 and the market rate on April 1st 2012 is 8%. Lower Under Co. closes its books annually on December 31 and uses the effective interest method.

Problem 1: The amortization of the bond premium or discount on period 3 is (round to the nearest dollar):

a. $2,000
b. None of the other alternatives are correct / Not enough data provided to calculate it
c. No amortization because bonds were issued at par
d. $1,710
e. $1,581

Reference no: EM132762860

Questions Cloud

Calculate the maximum dividend the business can pay out : On 1 January 2019, George commenced a retail business, which buys and sells fuel. He started the business by investing personal savings of $20,000.
What is the temperature in celsius : Today we measured the speed of sound to be 348 m/s. What is the temperature in Celsius?
Calculate the net force on the football the moment : Calculate the Net Force on the football the moment the ball was released. assuming that air resistance is negligible.
What is the speed of the waves on the rope : The rope is 3.9 m long, its mass is 1.2 kg, and the force exerted by the children is 45.3 N. What is the speed of the waves on the rope?
What amortization of the bond premium or discount on period : Lower Under Co. closes books annually on December 31 and uses the effective interest method. What amortization of the bond premium or discount on period 3 is?
What is temperature change : If all of its kinetic energy is converted to internal energy as it is caught, what is its temperature change?
How change in percentage of rental units in housing : PQR Limited makes major household appliances such as refrigerators, stoves and dishwashers. Sales are heavily dependent upon the number of housing starts.
What is the unpaid balance of the mortgage loan : Create the amortization schedule to be used for this loan. What is the unpaid balance of the mortgage loan at the end of the second month?
Write brief memo to neil armstrong evaluating this strategy : He has asked for your help in evaluating this plan. Write a brief memo to Neil Armstrong evaluating this strategy

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd