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On 1/1/10, R-U Ready issued $100,000, 6.5%, 10-year bonds at an effective rate of 4.75%. Interest...

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Accounting

On 1/1/10, R-U Ready issued $100,000, 6.5%, 10-year bonds at aneffective rate of 4.75%. Interest is paid annually on 12/31 of eachyear.

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Present the accounts and dollar amounts that would appear oncomparative balance sheets and income statements for the yearsending 12/31/16 and 12/31/15.

Answer & Explanation Solved by verified expert
3.6 Ratings (264 Votes)
Bonds face value is given as 100000 with coupon payment as 65 but effective rate is only 475 ie bonds is issued at a premium that can be calculated as follows FV 100000 PMT 6500 100000 x 65 Rate 475 effective rate as given NPER 10 PV 11367861    See Answer
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