What was the face value of the bond

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Question 1 - On December 31, year 0, your company issued a 5% par bond with a face value of $10,000. The bond matures after 5 years, on December 31, year 5. The firm uses the amortized cost/effective interest method to account for the bond (this is the method we learned in class). Based on this information, what would the interest expense on the bond be in year 4?

Question 2 - On December 31, year 0, your company issued a zero-coupon bond with proceeds of $20,000. The bond matures after 4 years, on December 31, year 4. Interest expense in the first year was 1500. The firm uses the amortized cost/effective interest method to account for the bond (this is the method we learned in class). Based on this information, what was the face value of the bond?

Reference no: EM133144786

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