What total amount of bond interest expense will be recognize

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Reference no: EM131972072

Enviro Company issues 10.00%, 10-year bonds with a par value of S290,000 and semiannual interest payments.

On the issue date, the annual market rate for these bonds is 7.00%, which implies a selling price of 124 3/8. The straight-line method is used to allocate interest expense.

1. Using the implied selling price of 124 3/8, what are the issuer s cash proceeds from issuance of these bonds? Cash proceeds

2. What total amount of bond interest expense will be recognized over the life of these bonds? Total bond interest expense over life of bonds: Amount repaid.

payments of Par value at maturity

Total repayments

Less amount borrowed

Total bond interest expense

Reference no: EM131972072

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