Renfro Company Issued $300,000 of 8%, 10-Year Bonds at 102

question 257

Essay

Renfro Company issued $300,000 of 8%, 10-year bonds at 102. Interest is paid annually, and the straight-line method is used for amortization. Assume that the market rate for similar investments is 7%. The bonds are issued on the date of the bonds.
a. What amount was received for the bonds?
b. How much interest is paid each interest period?
c. What is the premium amortization for the first interest period?
d. How much interest expense is recorded on the first interest date?
e. What is the carrying value of the bonds after the first interest date?

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Definitions:

Institutional Prejudice

Discrimination that is entrenched within the policies, practices, and structures of organizations or societies.

Overt Prejudice

Explicit and openly displayed negative attitudes or beliefs towards individuals from certain groups based on characteristics such as race, ethnicity, gender, or sexual orientation.

Socially Constructed

The concept that meanings, notions, or connotations are created and maintained through social interactions and communal consensus.

Internalized Racism

Refers to the internalization by people of racist attitudes towards members of their own ethnic group, including themselves.