136B Notes 2_3_11

123108 33109 total cv 33109 of bonds reacquired cv

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Unformatted text preview: 31/08-3/31/09: Total CV @ 3/31/09: % of bonds reacquired CV of bonds reacq: $ $ 101,833 $ (222) $ 101,611 60% ((Continued below)) 60,600 [$60,000x101%]=$60,600 [$890*(3/12)] $ $ 60,967 367 GAIN J/E @ 3/31/09: B/P Premium ** $ $ 60,000 967 Cash $ Gain $ -------------------------------------Original Total Premium $ 2,673 Less: 2008 Amortization $ (840) Total Premium, 12/31/08 $ 1,833 % of bonds reacquired 60% Prm on bonds reac, 12/31/08 $ 1,100 Amor., 12/31/08-3/31/09 $ (133) Unam. Premium, 3/31/09 $ 967 60,600 367 Bond issue costs: *Bond issue costs… fees that are critical to actually issuing the bonds *Related legal and accounting fees, printing costs, etc. *These are required to be reported as "deferred charge" (which is an asset… like a prepaid exp) >Youre incurring these costs upfront to get this bond financing, but youre getting the benefit of these over the length of the life of the bonds. *…And then Amortize to Expense over the bond term, pretty much always straightline (just like you would amortize a prepaid expense) Exercise 14-12 (Handout): Reacquisition Prce Net CV of bonds reacq (1/2/07) Face Value Less: Unam discount Unam bond issue costs $ 909,000 [101% x 900,000] $ 900,000 $ (13,500) $ (7,200) Calculations: 1) Orig...
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