On January 1, 2019 Maplewood Group issued $20 million of 6% bonds. Interest is payable...
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Accounting
On January 1, 2019 Maplewood Group issued $20 million of 6% bonds. Interest is payable semiannually on June 30th and December 31. The bonds were issued at an effective annual rate of 5% and mature in 10 years.
now assume that Maplewood incurred $500,000 of debt issuance costs associated with these bonds.
a. Revise your journal entry above to record the original issuance of these bonds.
b. What is the effective interest rate on these bonds, when considering the debt issuance costs? (One again, you know PV, Pmt, FV and N). Solve for I.
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