Accounting for Notes Issues at a Premium The Longo Corporation issued $50 million maturity value...
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Finance
Accounting for Notes Issues at a Premium
The Longo Corporation issued $50 million maturity value of six percent coupon rate notes, with interest paid semiannually. At the time of the note issuance, equivalent risk-rated debt instruments carried a yield rate of four percent. The notes matured in five years.
Calculate the proceeds that the Longo Corporation would receive from the sale of the notes. Round your answer to the nearest dollar.
$Answer
How will the notes be reported on Longos balance sheet immediately following the sale? Round your answers to the nearest dollar.
| Bonds payable | $Answer |
| Plus: Bond Premium | $Answer |
| Book Value | $Answer |
Calculate the interest expense on the notes for the first year. Round answers to the nearest dollar.
| First six months | $Answer |
| Second six months | $Answer |
Calculate the book value of the notes at the end of the first year. Round answer to the nearest dollar.
$Answer
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