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What is the amount of interest expense porter

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Reference no: EM131781856

Porter Company received proceeds of $211,500 on 10-year, 8% bonds issued on January 1, 2006. The bonds had a face value of $200,000, pay interest annually on December 31st, and have a call price of 102. Porter uses the straight-line method of amortization.

What is the amount of interest Porter must pay the bondholders in 2006?

a. $16,920

b. $16,000

c. $16,320

d. $1,692

What is the amount of interest expense Porter will show with relation to these bonds for the year ended December 31, 2007?

a. $16,000

b. $16,920

c. $14,850

d. $12,550

What is the carrying value of the bonds on January 1, 2008?

a. $200,000

b. $209,200

c. $190,800

d. $210,350

Porter Company decided to redeem the bonds on January 1, 2008. What amount of gain or loss would Porter report on their 2008 income statement?

a. $9,200 gain

b. $5,200 gain

c. $5,200 loss

d. $9,200 loss

Reference no: EM131781856

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