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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