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Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity:

Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value
01/01/2021 $194,758
06/30/2021 $7,000 $7,790 $790 195,548
12/31/2021 7,000 7,822 822 196,370
06/30/2022 7,000 7,855 855 197,225
12/31/2022 7,000 7,889 889 198,114
06/30/2023 7,000 7,925 925 199,039
12/31/2023 7,000 7,961 961 200,000

THA issued the bonds for:______

Respuesta :

Answer:

$194,758

Explanation:

The issue price of a bond is the relationship between the interest rate on the bond and the market interest rate in the same period.

However , the carrying value at the issuance date is the issue price.

Date            Cash paid    Interest   Increase   Carrying Value

01/01/2021     194,758

06/30/2021    7000          7790      790                  195548

12/31/2021      7000           7822     822                  196,370

06/30/2022    7000          7855     855                  197225

12/31/2022      7000          7,889     889                  198,114

06/30/2023    7,000          7,925    925                   199,039

12/31/2023      7000           7961      961                    200,000

The carrying value of the bond at 01/01/2021 is the issue price while its face per value is $2,000,000

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