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  3. e9.19 accounting for bonds sold at a discount. the

E9.19 Accounting for Bonds Sold at a Discount. The Salina National Bank raised capital through...

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Accounting

E9.19 Accounting for Bonds Sold at a Discount. The Salina National Bank raised capital through the sale of $180
million face value of 4.5 percent coupon rate, ten-year bonds. The bonds paid interest semiannually and were
sold at a time when equivalent risk-rated bonds carried a yield rate of six percent.
Calculate the proceeds that The Salina National Bank received from the sale of the 4.5 percent bonds.
How will the bonds be disclosed on Salina's balance sheet immediately following the sale? Calculate the
interest expense on the bonds for the first year that the bonds are outstanding. Calculate the book value of the
bonds at the end of the first year.
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