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What will be the carrying value of the bond on june

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Reference no: EM132523400

George Inc. sold a bond for $637,483 when the face of the bond was 550,000. The interest rate on the bond was 8% when the market was 6%. The bond term is 10 years and interest is paid semi annually on June 30 and December 31.

Using the information above answer the following questions

Question a. Did the bond issue at a premium, discount or face value?

Question b. Over 10 years will the carrying value of the bond increase or decrease?

Question c. If the bond was issued on January 1, 2020, what will be the carrying value of the bond On June 30, 2021.

a. If George decides to retire the bond on June 30,2021 for 102% of the face amount;

1. Did George sustain a gain or loss?

2. Journalize the retirement of the bond

  •  Fifth Corporation issued $630,000 of its 7 percent bonds payable on April 1, 2016 when the market was 5%. The term for the bonds was 5 years. Interest is payable semiannually on October 1 and April 1.

Question : What is the present value of the bonds

Reference no: EM132523400

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