Huskey Mining Corporation issued bonds with a par value of
$106,000 on January 1, 2020. The annual contract rate on the bonds
is 9.50%, and the interest is paid semiannually. The bonds mature
after three years. The annual market interest rate at the date of
issuance was 11.50%, and the bonds were sold for $100,746.
a. What is the amount of the original discount on
these bonds?
b. How much total bond interest expense will be
recognized over the life of these bonds? (Do not round
intermediate calculations. Round the final answer to the nearest
whole dollar.)
c. Present an amortization table for these bonds;
use the effective interest method of allocating the interest and
amortizing the discount. (Do not round intermediate
calculations. Round the final answers to the nearest whole dollar.
Enter all the amounts as positive values.)
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