Chapter_11_Zero_Coupon_Bond

Chapter_11_Zero_Coupon_Bond - $91,851.06 Payments +...

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Zero Coupon/Deep Discount Bond Present Value of Single Sum: FV 500,000.00 Interest 7% Periods 3 $408,148.94 $408,150 (using table) $408,148.94 Present Value of Annuity: Payments Interest Periods $0.00 (using table) $0.00 Present Value of Bond: $408,148.94 $500,000.00 Discount $91,851.06 $91,850 (using table) A B C D E Jan-10 $91,851 $408,149 31-Dec-10 $28,570.43 $28,570.43 $63,280.64 $436,719.36 31-Dec-11 $30,570.36 $30,570.36 $32,710.28 $467,289.72 31-Dec-12 $32,710.28 $32,710.28 0 $500,000.00 Total Interest Expense:
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Unformatted text preview: $91,851.06 Payments + discount Year 1 Year 2 Year 3 $408,148.94 x.07 year 1 $28,570.43 year 2 $30,570.36 Year 3 $32,710.28 $500,000.00 End of 3yrs $500,000.00 $0.00 $0.00 $500,000.00 $500,000.00 Interest Calculation Date Interest Payment Interest Expense 7% of Carrying Amount Column E Discount Amortization (B-A) Premium Account Balance (D-C) Bond Carrying Amount ($500,000 +D)...
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