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Business, 09.04.2021 03:50 Aidanjsauer

On January 1, 2019. Griz Industries sold ten- year term bonds with a face value of $1,000,000. The bonds carried a coupon rate of 4%. with interest payable annually. The market rate of interest on the date the bonds were issued was 5%. The proceeds that were received by Griz upon issuance of the bonds were $975,000 (Note: fictional amount for ease of your calculations - not based on actual PV calculations). Based on these facts, answer the following questions (show your calculations to receive credit): A. How much actual interest must Griz pay to bondholders (creditors) in 2019?
B. How much will Griz recognize as interest expense in 2019 (use the effective interest method)?
C. What is the amount of bond discount amortized in 2019 (use the effective interest method)?
D. What is the book value (carrying value) of the bonds as of January 1, 2020, following payment of the interest for 2019?

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On January 1, 2019. Griz Industries sold ten- year term bonds with a face value of $1,000,000. The b...
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