Reference no: EM132999527
Question - On January 1, 2016, a €2,000,000 bond was issued by Harper Corp. with total proceeds of €1,880,000, maturing in 10 years.
a. If the coupon rate is 6%, and the carrying value of the bond on December 31, 2016 is €1,890,000, how much is the interest expense for 2016?
b. As of December 31, 2018, what is the balance of the Bonds Payable account considering that the discount amortization for 2017 and 2018 is €12,000 and €15,000, respectively?
On January 1, 2012, Harper Corp. issued € 200,000 face value bond with coupon interest of 5% payable annually. The first interest payment was due on January 1, 2013. On December 31, 2012, the carrying amount of the bond was €188,835.24, while on December 31, 2013, it was €190,165.35.
c. How much is the interest expense for 2013?
d. What is the effective rate on the bond issuance?
e. What is the balance of the interest payable account as of December 31, 2013, if any?
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