Long Term Investment Paper 6

Discount-Mart issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
8,640,967
1 300k 345,639 45,639 8,686,606
2 300k 347,464 47,464 8,734,070
3 300k 349,363 49,363 8,783,433
4 300k
What is the carrying value of the bonds as of December 31, 2012?

Discount-Mart issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
8,640,967
1 300k 345,639 45,639 8,686,606
2 300k 347,464 47,464 8,734,070
3 300k 349,363 49,363 8,783,433
4 300k
What would be the total interest cost of the bonds over their full term?

Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
11,487,747
1 400k 344,632 55,368 11,432,379
2 400k 342,971 57,029 11,375,350
3 400k 341,261 58,739 11,316,611
4 400k
What is the stated annual rate of interest on the bonds?

Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
11,487,747
1 400k 344,632 55,368 11,432,379
2 400k 342,971 57,029 11,375,350
3 400k 341,261 58,739 11,316,611
4 400k
What is the effective annual rate of interest on the bonds?

Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
11,487,747
1 400k 344,632 55,368 11,432,379
2 400k 342,971 57,029 11,375,350
3 400k 341,261 58,739 11,316,611
4 400k
What is the interest expense on the bonds in 2012?

Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
11,487,747
1 400k 344,632 55,368 11,432,379
2 400k 342,971 57,029 11,375,350
3 400k 341,261 58,739 11,316,611
4 400k
What is the carrying value of the bonds as of December 31, 2012?

Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.
Pmt Cash Eff.Int Decr.Bal Out.Bal
11,487,747
1 400k 344,632 55,368 11,432,379
2 400k 342,971 57,029 11,375,350
3 400k 341,261 58,739 11,316,611
4 400k
What would be the total interest expense recognized for the bond issue over its full term?

Auerbach Inc. issued 4% bonds on October 1, 2011. The bonds have a maturity date of September 30, 2021 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2012. The effective interest rate established by the market was 6%. Auerbach issued the bonds:

Auerbach Inc. issued 4% bonds on October 1, 2011. The bonds have a maturity date of September 30, 2021 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2012. The effective interest rate established by the market was 6%. How much cash interest does Auerbach pay on March 31, 2012?

Auerbach Inc. issued 4% bonds on October 1, 2011. The bonds have a maturity date of September 30, 2021 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2012. The effective interest rate established by the market was 6%. Assuming that Auerbach issued the bonds for $255,369,000, what interest expense would it recognize in its 2011 income statement?