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On January 1, 2018 ABC Corporation issued a five-year $1,000,000, 7%, at $1,050,000. Interest is paid...

On January 1, 2018 ABC Corporation issued a five-year $1,000,000, 7%, at $1,050,000. Interest is paid annually on December 31. The market rate of interest is 6%.

  1. Using the effective interest rate method, what is the interest expense at December 31, 2018

Interest Expense at December 31,2018 = $___________________________

  1. What is the carrying value of the bond at December 31, 2018?

Carrying value of bond on December 31, 2018 = $ ________________________

  1.   What is the carrying value of the bond at January 1, 2023?             

            Carrying value of the bond at January 1, 2023 =$_________________________

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Please give rating to my answer.

ekkarill92 answered 1 year ago
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