What is the annual amount of cash Stanton will pay

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Problem - Stanton Company issued on January 1, 2019, $400,000 9%, 5-year bonds at 96. The bonds pay annual interest on December 31. Stanton uses the straight-line method of amortization and has a calendar year end.

Required -

a) What is the annual amount of cash Stanton will pay to bondholders for interest in year 1?

b) What amount of interest expense Stanton should recognize for Year 1?

c) What amount the discount amortization Stanton should recognize for Year 1?

d) What amount of interest expense and premium amortization should Stanton recognize for Year 2?

e) What is the total amount Stanton will pay to the bondholder at the end of year 5?

Reference no: EM132856018

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