DEVOR Bond Illustration

DEVOR Bond Illustration - DEVOR CORPORATION BOND...

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DEVOR CORPORATION BOND ILLUSTRATION Bond amortization table for discount Annual Annual Interest interest interest expense Discount Bond Periods be paid @ 10% recorded @ 12% amortization arrying value Issue date 92,791 1 10,000 11,135 1,135 93,926 2 10,000 11,271 1,271 95,197 3 10,000 11,424 1,424 96,621 4 10,000 11,594 1,594 98,215 5 10,000 11,785 1,785 100,000 50,000 57,209 7,209 - This is the that is r interest p the This is th time it recogni value just The discount is GAAP's way of adjusting the stated interest rate to the market rate of interest, so it increases the amount of reported interest expense DEVOR has ot recognize each period even though the amount of the actual interest payment is made at the stated rate on the bond contract. The amount paid to the bondholders is fixed by the contract and remains constant over the life of the bond. The adjusted = the balanc amortized. A value is 93.9
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e liability to the bondholders on the date of issue recorded on DEVOR'S books; it changes every
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DEVOR Bond Illustration - DEVOR CORPORATION BOND...

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