Park Corporation is planning to issue bonds with a face value of $770,000 and a

Question

Park Corporation is planning to issue bonds with a face value of $770,000 and a coupon rate of 7.5 percent. The bonds mature in 8 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)

Explanation / Answer

30-Jun Interest expense 30853         Cash 28875 =770000*7.5%/2         Discount on bonds payable 1978 3 Long-term liabilities: Bonds payable 770000 Discount on bonds payable 42067 727933

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