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A company issues $14500000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $14164836. Using effective-interest amortization,
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A company issues $14500000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $14164836. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2020 balance sheet?

User Afaq Ahmed Khan
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1 Answer

2 votes

Answer:$14,709,481

Step-by-step explanation:

$14,709,481

$14,703,108 + [($14,703,108 × .04) - $585,000] + [$14,706,232 × .04) - $585,000] = $14,709,481.

User Habib Zare
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