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12-1 12-2_BondsDarby_Company

12-1 12-2_BondsDarby_Company - Darby Company Bonds Problem...

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Darby Company Bonds Problem 15-1 Face Value Face Rate Payments Interest = 100,000 x 0.15 = 15,000 PVA of \$15,000 for 5 periods + PV of \$100,000 due at end of 5 periods @ 10% = \$118,953.93 15,000 PMT 100,000 FV 10 I/Y 5 N CPT PV 118,953.93 . Ending Payments Interest 10% Principal/Premium Principal Balance 1/1/x1 118,953.93 12/31/x1 15,000.00 11,895.39 3,104.61 115,849.32 12/31/x2 15,000.00 11,584.93 3,415.07 112,434.26 12/31/x3 15,000.00 11,243.43 3,756.57 108,677.68 12/31/x4 15,000.00 10,867.77 4,132.23 104,545.45 12/31/x5 15,000.00 10,454.54 4,545.46 99,999.99 12/31/x5 100,000.00 100,000.00 (0.01) Rounding

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Darby Company Bonds Problem 15-1 1/1/20x1 Cash 118,953.93 Bond Premium 18,953.93 Bond Payable 100,000.00 Issued bond at a premium 12/31/20x1 Interest Expense 11,895.39 Bond Premium 3,104.61 Cash 15,000.00 To record annual payment 12/31/20x2 Interest Expense 11,584.93 Bond Premium 3,415.07 Cash 15,000.00 To record annual payment 12/31/20x3 Interest Expense 11,243.43 Bond Premium 3,756.57 Cash 15,000.00 To record annual payment 12/31/20x4 Interest Expense 10,867.77 Bond Premium 4,132.23 Cash 15,000.00 To record annual payment 12/31/20x5 Interest Expense 10,454.54 Bond Premium 4,545.46 Cash 15,000.00 To record annual payment 12/31/20x5 Bond Payable 100,000.00 Cash 100,000.00 To record maturity and payoff of bond
Darby Company Bonds Problem 15-1 Face Value Face Rate Payments Interest = 100,000 x 0.15 = 15,000

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