3-1: The Acme Company issued 5% 10-year bonds payable at 90 on December 31 2010.

3-1: The Acme Company issued 5% 10-year bonds
payable at 90 on December 31 2010.
At December 31 2012 Acme reported the bonds payable as follows: Bonds Payable 400000 less: Discount 32000 368000
Acme uses the straight line amortization method and pays
interest twice per year on June 30
and December 31.Required: a: What is the maturity value of the
bonds? b: What is the carrying amount of the bonds
on December 31 2012? c: What is the annual cash interest payment
on the bonds? d: How much interest expense will Acme record
each year?
e: What will be the
carrying amount of the bonds on December 31 2014