A company with an annual accounting year ending on December 31 issued bonds on January 1 in the amount of $500,000 maturing in 10 years with interest payable each June 30 and December 31 at a 6% annual rate. The company uses straight-line amortization for any bond discounts or premiums.
Required:
Provide the following amounts to be reported in the company financial statements at the end of year one under each scenario.
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Issued at Par
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Issued at 99
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Issued at 102
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Interest expense
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Bonds payable
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Unamortized premium or discount
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Net bond liability
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Cash interest paid
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