[becca9780]

Silcon Company issued $800,000 of 6%, 10-year bonds on one of its semi-annual interest dates for $690,960 to yield an effective annual rate of 8%. The effective interest method of amortization is to be used.
What amount of discount (to the nearest dollar) should be amortized for the first 6 months interest period?
a. $11,271
b. $5,452
c. $7,277
d. $3,638

[morgaine300]

Ditto what I said about making an attempt to do the work. If you have specific questions about how to do something like this, then ask a specific question. I won't just tell you an answer.

[rhoyalelegance]

The answer is b.) 5452

800,000 @ 6% is 48,000 annually and 24, 000 semi-annually there are 20 periods (10 years x 2 ).

Cash 690,960 (given)
Discount of bond payable 109, 040
Bonds Payable 800,000


discount/# of periods 109,040/20 = 5,452

[morgaine300]

If you're going to do people's homework for them, at least know how to do it. I should have let it stand and let the person get the wrong answer - good lesson to be learned there.

[chunami]

690,960*.04=27,638
semi coupon 24,000
difference = 3,638 is the discount ammortization added on to the bonds book value.

[chunami]

690,960*.04=27,638
semi coupon 24,000
difference = 3,638 is the discount ammortization added on to the bonds book value.

[chunami]

690,960*.04=27,638
semi coupon 24,000
difference = 3,638 is the discount ammortization added on to the bonds book value.

[chunami]

690,960*.04=27,638
semi coupon 24,000
difference = 3,638 is the discount ammortization added on to the bonds book value.

[chunami]

690,960*.04=27,638
semi coupon 24,000
difference = 3,638 is the discount ammortization added on to the bonds book value.

[chunami]

690,960*.04=27,638
semi coupon 24,000
difference = 3,638 is the discount ammortization added on to the bonds book value.

[chunami]

Is this correct?

[morgaine300]

Yes, it's correct, but please stop posting the same thing over and over. Also start a new thread for your homework instead of tagging onto someone else's.

[daveyhabok]

$690,960
$48,000 $55,277 $7,277 $698,237
$48,000 $55,859 $7,859 $706,096
$48,000 $56,488 $8,488 $714,583
$48,000 $57,167 $9,167 $723,750
$48,000 $57,900 $9,900 $733,650
$48,000 $58,692 $10,692 $744,342
$48,000 $59,547 $11,547 $755,889
$48,000 $60,471 $12,471 $768,361
$48,000 $61,469 $13,469 $781,829
$48,000 $62,546 $14,546 $796,376
$48,000 $63,710 $15,710 $812,086
$48,000 $64,967 $16,967 $829,053
$48,000 $66,324 $18,324 $847,377
$48,000 $67,790 $19,790 $867,167
$48,000 $69,373 $21,373 $888,541
$48,000 $71,083 $23,083 $911,624
$48,000 $72,930 $24,930 $936,554
$48,000 $74,924 $26,924 $963,478
$48,000 $77,078 $29,078 $992,556
$48,000 $79,404 $31,404 $1,023,961

[Shenanas]

Jesus tap dancing Christ Morgaine, they answered the question in a different bleeding year than it was asked, go suck a nut.

[sandilmd]

3638.40