Ask Question
5 September, 09:33

On January 1, 2017, Shay issues $300,000 of 10%, 15-year bonds at a price of 97.75. Six years later, on January 1, 2023, Shay retires 20% of these bonds by buying them on the open market at 105.25. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount.

What is the amount of the discount on the bonds at January 1, 2013?

0
Answers (1)
  1. 5 September, 11:05
    0
    The correct answer is $6,750.

    Explanation:

    According to the scenario, the given data are as follows:

    Bonds = $300,000

    Price of bonds = 97.75

    So, we can calculate the discount on the bonds by using following formula:

    Discount on bonds = $300,000 - ($300,000 * 97.75%)

    = $300,000 - $293,250

    = $6,750

    Hence, the amount of the discount on the bonds at January 1, 2013 is $6,750.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On January 1, 2017, Shay issues $300,000 of 10%, 15-year bonds at a price of 97.75. Six years later, on January 1, 2023, Shay retires 20% ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers