The acme company issued 5 10-year bonds payable at 90 on

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Reference no: EM13378179

The Acme Company issued 5%, 10-year bonds payable at 90 on December 31, 2010. At December 31, 2012, Acme reported the bonds payable as follows:

Bonds Payable 400,000

less: Discount 32,000 368,000

Acme uses the straight line amortization method and pays interest twice per year on June 30 and December 31.

Required: a: What is the maturity value of the bonds?

b: What is the carrying amount of the bonds on December 31, 2012?

c: What is the annual cash interest payment on the bonds?

d: How much interest expense will Acme record each year?

e: What will be the carrying amount of the bonds on December 31, 2014

Reference no: EM13378179

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