Homework Session 20 Spring 2010

# Homework Session 20 Spring 2010 - Homework Session 20...

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Unformatted text preview: Homework Session 20 Spring 2010 P10–9. Req. 1 Computations: Interest: \$2,000,000 x 10% x 1/2 = \$ 100,000 Present value \$ 2,000,000 x 0.4564 = 912,800 \$ 100,000 x 13.5903 = 1,359,030 Issue price \$2,271,830 Req. 2 June 30 December 31 Interest expense...................................... \$86,408 * \$86,408 * *\$2,271,830 - \$2,000,000= \$271,830 ÷ 20 periods = \$13,592 \$100,000 - \$13,592 = \$86,408 Req. 3 June 30 December 31 Cash paid................................................. \$100,000 \$100,000 Req. 4 June 30 December 31 Bonds payable......................................... \$2,258,238* \$2,244,646** *\$2,271,830- \$13,592 = \$2,258,238 **\$2,258,238- \$13,592 = \$2,244,646 P10–10. Req. 1 Computations: Interest: \$700,000 x 13% x 1/2 = \$ 45,500 Present value \$ 700,000 x 0.5584 = 390,880 \$ 45,500 x 7.3601 = 334,885 \$725,765 Req. 2 June 30 December 31 Interest expense...................................... \$43,546* \$43,429** \$725,765 x 12% x ½ = \$43,546 **[\$725,765 - (\$45,500- \$43,546)] x 12% x ½= \$43,429...
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## This note was uploaded on 04/25/2010 for the course HADM 1121 taught by Professor Dittman during the Spring '07 term at Cornell University (Engineering School).

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Homework Session 20 Spring 2010 - Homework Session 20...

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