Stiller issues bonds several years ago when the market rate of interest was 4.5%. The stated rate of interest on the bonds was 5% and they pay interest annually on December 31. The face value of the bonds is 200,000. The carrying value of the bonds at 1/1/Year7 is 208,400. (note that you do not need to know the original issue price of these bonds to answer the following questions.)
How much interest will Stiller pay the bondholders on 12/31/Year7?
How much interest expense will Stiller recognize for these bonds for the year ended 12/31/Year7?
What will be the carrying value of the bonds on the 12/31/Year7 balance sheet?