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(Solved by Expert Tutors) On March 31, 2011 Louis Company issued $20,000,000 face amount of


On March 31, 2011 Louis Company issued $20,000,000 face amount of 7%, 5-year bonds payable, with interest

payable each June 30 and December 31. The company received cash of $20,200,000, including the accrued interest from December 31, 2010, the bonds are dated on this date. Louis uses the straight-line method of amortizing any discount or premium over the remaining life of the bonds.

Required:

a)What was the amount of accrued interest received by Louis on March 31, 2011 when the bonds were issued?

b)What was the amount of discount or premium on the bonds at issuance date? Is the bonds issued at discount or premium?

c)What amount of cash is paid to bondholders for interest during year 2011?

d)What is Louis ' total interest expense for year 2011 related to this bond issue?

e) What is the carrying value of this bond issue as of December 31, year 2011?

 


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Apr 19, 2020

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