Chapter%2012%20-%20In-Class%20Exercises%20-%20Solution%20#2

Chapter%2012%20-%20In-Class%20Exercises%20-%20Solution%20#2...

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Unformatted text preview: In‐Class Exercises Exercise 2: Face Value Stated Rate Market Rate No. of Periods $1,200,000.00 4% 4.5% 10 Accrued Interest (January‐March): Amortization Table: Date Interest paid 1/1/2011 6/30/2011 $48,000.00 12/31/2011 $48,000.00 6/30/2012 $48,000.00 12/31/2012 $48,000.00 6/30/2013 $48,000.00 12/31/2013 $48,000.00 6/30/2014 $48,000.00 12/31/2014 $48,000.00 6/30/2015 $48,000.00 12/31/2015 $48,000.00 Issuance on 4/1/2011: Cash Discount on Bonds Payable Bonds Payable Interest Payable Payment on 6/30/2011: Interest expense Interest payable Discount on bonds payable Cash Payment on 12/31/2015 Interest expense Discount on bonds payable Cash Retirement at maturity: Bond Payable Cash Redeeming @ 98.5 on July 1, 2013: Bond Payable Loss on Bond Redemption Discount on Bonds Payable Cash Interest Expense $51,863.57 $52,037.43 $52,219.11 $52,408.97 $52,607.37 $52,814.71 $53,031.37 $53,257.78 $53,494.38 $53,741.63 Discount Amortization $3,863.57 $4,037.43 $4,219.11 $4,408.97 $4,607.37 $4,814.71 $5,031.37 $5,257.78 $5,494.38 $5,741.63 1,176,523.69 47,476.31 1,200,000.00 24,000.00 Interest Payment $48,000.00 Chapter 12 Price of the Bond $1,152,523.69 $24,000.00 $1,176,523.69 Discount $47,476.31 Unamortized Bond Carrying Discount Value $47,476.31 $1,152,523.69 $43,612.74 $1,156,387.26 $39,575.32 $1,160,424.68 $35,356.21 $1,164,643.79 $30,947.23 $1,169,052.77 $26,339.86 $1,173,660.14 $21,525.15 $1,178,474.85 $16,493.79 $1,183,506.21 $11,236.01 $1,188,763.99 $5,741.63 $1,194,258.37 ($0.00) $1,200,000.00 27,863.57 24,000.00 3,863.57 48,000.00 53,741.63 5,741.63 48,000.00 1,200,000.00 1,200,000.00 1,200,000.00 8,339.86 26,339.86 1,182,000.00 ACCT 4050 Page 3 of 3 Chapter 12 ‐ In‐Class Exercises ...
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This note was uploaded on 04/06/2011 for the course ACCT 4050 taught by Professor Rodney during the Spring '11 term at University of Georgia Athens.

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