On April 30, year 2, Karlin Company issued $6,000,000 face amount of 10%, 10-year bonds payable, with interest payable each June 30 and December 31. The company received cash of $6,084,000, including the accrued interest from December 31, year 1. Karlin uses the straight-line method of amortizing any discount or premium over the remaining life of the bonds - 116 months.
a) What was the amount of accrued interest received by Karlin on April 30, year 2, when the bonds were issued? (Do not assume the bonds were issued at par.)
b) What was the amount of discount or premium on the bonds at issuance date?
c) What amount of cash is paid to bondholders for interest during year 2?
d) What is Karlin's total interest expense for year 2 related to this bond issue?
e What is the carrying value of this bond issue as of December 31, year 2?