Question
Prescott Corporation issued ten thousand $1,000 bonds on January 1, 2018. The bonds have a 10-year...
Prescott Corporation issued ten thousand $1,000 bonds on January
1, 2018. The bonds have a 10-year term and pay interest
semiannually. This is the partial bond
amortization schedule for the bonds.
| Payment | Cash | Effective Interest |
Decrease in Balance |
Outstanding Balance |
||||||||
| 11,487,747 | ||||||||||||
| 1 | 400,000 | 344,632 | 55,368 | 11,432,379 | ||||||||
| 2 | 400,000 | 342,971 | 57,029 | 11,375,350 | ||||||||
| 3 | 400,000 | 341,261 | 58,739 | 11,316,611 | ||||||||
| 4 | 400,000 | |||||||||||
What is the book value of the bonds as of December 31, 2019?
$11,432,379.
$11,375,350.
$11,316,611.
$11,256,109.
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