On July 1, 2012, Insta Inc. issues $3,000,000 face value seven-year bonds with annual interest payments of $150,000 to be paid each June 30. The market interest rate is 7.5%. According to the effective interest rate method of amortization, Insta is most likely to report: Choose an option: i) an interest expense of $150,000 in the June 30, 2013 income statement. ii) a cash inflow of $195,207 from operating activities in the June 30, 2013 statement of cash flow. iii) a liability of $2,647,962 in the June 30, 2013 balance sheet.
On July 1, 2012, Insta Inc. issues $3,000,000 face value seven-year bonds with annual interest payments of $150,000 to be paid each June 30. The market interest rate is 7.5%. According to the effective interest rate method of amortization, Insta is most likely to report: Choose an option: i) an interest expense of $150,000 in the June 30, 2013 income statement. ii) a cash inflow of $195,207 from operating activities in the June 30, 2013 statement of cash flow. iii) a liability of $2,647,962 in the June 30, 2013 balance sheet.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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On July 1, 2012, Insta Inc. issues $3,000,000 face
Choose an option:
i) an interest expense of $150,000 in the June 30, 2013 income statement.
ii) a
iii) a liability of $2,647,962 in the June 30, 2013 balance sheet.
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