Reference no: EM132581145

The notes to the Community Charities financial statements reported the following data on December 31, 2017 (end of the fiscal year):

Note D-Long-Term Debt

7% bonds payable, due in 2023                  $500,000
Less: Discount                                       (26,032)                      $473,968

61/2% notes payable; principal due in annual amounts of $50,000      300,000
in 2021 through 2026

Community Charities amortizes bonds by the effective-interest method and pays all interest amounts at December 31.

Question 1: What is the maturity value of the 7% bonds?

Question 2: What is Community Charities's annual cash interest payment on the 7% bonds?

Question 3: What is the carrying amount of the 7% bonds at December 31, 2017?

Question 4: Prepare the amortization table through December 31, 2020, for the 7% bonds. The market interest rate on the bonds was 8%. Round all amounts to the nearest dollar. How much is Community Charities's interest expense on the 7% bonds for the year ended December 31, 2020?

Question 5: Show how Community Charities would report the 7% bonds payable and the 6½% notes payable at December 31, 2020.