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Hillinger, Inc. issues $100,000 of 4% bonds on January 1, Year 1. The bonds have a five-year term and pay interest semiannually on June 30 and December 31 each year. Assuming a market interest rate of 5% and an issue price of $95,624, what is the carrying value of the bonds as of June 30, Year 1

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anthougo

Hillinger, Inc.'s Bonds Payable has a carrying value of $96,014.60 as of June 30, Year 1.

Data and Calculations:

Bonds Face Value = $100,000

Coupon interest rate = 4%

Maturity period = 5 years

Payment of interest = June 30 and December 31

Market interest rate = 5%

Bonds Issue Price = $95,624

Bonds Discount = $4,376 ($100,000 - $95,624)

June 30, Year 1:

Cash payment = $2,000 ($100,000 x 4% x 1/2)

Interest Expense = $2,390.60 ($95,624 x 5% x 6/12)

Amortization of Discount = $390.60 ($2,390.60 - $2,000)

Bonds carrying value = $96,014.60 ($95,624 + $390.60)

Learn more: brainly.com/question/23265123

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