Chapter 8
Non-Current Liabilities
410
Application Questions Group B
Note: Round all calculations and final answers to whole dollar. When needed, use the present value
factors provided in the textbook.
AP-1B (
2
4
)
On January 1, 2016, Bootic Inc. issued $3,500,000, 6% callable bonds due in 12 years. At the
time of issue, the market interest rate is 5% (interest is due annually). Calculate the discount or
premium at which the bonds were issued. The company’s year-end is December 31.
AP-2B (
3
)
On April 1, 2016, Dixon Company issued $300,000 worth of bonds, with the interest rate
of 12% per annum. The bonds will mature on March 31, 2023. Interest will be paid semi-
annually on September 30 and March 31. The company has a December 31 year-end.
Calculate the accrued interest payable on December 31, 2017.
