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tutorial_8 - AP10–6 Req 1 Computations Interest...

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Unformatted text preview: AP10–6. Req. 1 Computations: Interest: $4,000,000 x 9% = $ 360,000 Present value $ 4,000,000 x 0.7473 = 2,989,200 $ 360,000 x 4.2124 = 1,516,464 Issue Price $4,505,664 Req. 2 2009 2010 Interest expense...................................... $270,340* $264,960** $4,505,664 x 6% = $270,340 **[$4,505,664 - ($360,000 - $270,340)] x 6% = $264,960 Req. 3 2009 2010 Cash paid................................................. $360,000 $360,000 Req. 4 2009 2010 Bonds payable......................................... $4,416,004 $4,320,964** *$4,505,664 - $89,660 = $4,416,004 ** $4,416,004 - $95,040 = $4,320,964 E10–16. Computations: Interest: $2,000,000 x 5% = $ 100,000 Present value: $2,000,000 x 0.4350 = 870,000 $ 100,000 x 13.2944 = 1,329,440 Issue price = $2,199,440 Req. 1 January 1: Cash (+A)............................................................................... 2,199,440 Premium on Bonds Payable (+L)....................................... 199,440 Bonds Payable (+L)...........................................................Bonds Payable (+L)....
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tutorial_8 - AP10–6 Req 1 Computations Interest...

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