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On January 1, 2017, Babb Trailers, Inc. issued $6,500,000 of par value bonds for $6,200,000.
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On January 1, 2017, Babb Trailers, Inc. issued $6,500,000 of par value bonds for $6,200,000. The bonds pay interest semiannually on January 1 and July 1. The contract rate of interest is 3% while the market rate of interest for similar bonds is 5%. The bond premium or discount is being amortized at a rate of $10,000 every six months. The carrying value on January 2, 2019 is: