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On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,286,574 1 370,000 377,194 7,194 6,293,768 2 370,000 377,626 7,626 6,301,394 3 370,000 378,084 8,084 6,309,478 4 370,000 378,569 8,569 6,318,047 5 370,000 379,083 9,083 6,327,130 6 370,000 379,628 9,628 6,336,758 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 370,000 432,132 62,132 7,264,327 39 370,000 435,860 65,860 7,330,187 40 370,000 439,813 69,813 7,400,000 Required: 1. What is the face amount of the bonds

Answer :

anthougo

Answer:

The face amount of the bonds is $7,400,000

Explanation:

The face value or amount of the bonds is the amount that is repaid to the bondholder at the end of the maturity period.  The face amount is usually stated on the bond certificate when issued, and the issuer of the bonds is expected to pay this amount at maturity.  The amortization schedule of the bonds shows how the interest expense and payments are made and the amortization of either premiums or discounts on the bonds.  It helps the issuer to account for the instrument over the maturity period.

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