What is the cash coupon payment in year three

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Assume a 3 year $100,000 bond with an 11% stated rate and a 9% effective rate was sold for $105,063. Interest is paid annually. Use the straight line method for amortization.

A) What is the interest expense in the first year of bond?

B) What is the cash coupon payment in year 3?

C) Prepare all of year 3 journal entries related to the bond

D) What is the interest expense in the second year of the bond

E) What is the amortization of the bond premium that would be recorded in year 2?

F) Why were investors willing to pay a premium for this bond?

Reference no: EM131205374

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