ch14(1) - Prepare the amortization table for 2011, assuming...

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Name: __________________________ Problem chapter 14 1. Bond issue price and discount amortization. On January 1, 2011, Grider Industries, Inc. issued five-year bonds with a face value of $2,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Use table values from chapter 6: Instructions (a) Calculate the issue price of the bonds. (b) Without prejudice to your solution in part (a), assume that the issue price was $1,800,000.
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Unformatted text preview: Prepare the amortization table for 2011, assuming that amortization is recorded on interest payment dates. (1) PV of Principal =PV(0.04,10,0,-2000000,0)=1351128.34 PV of interest = PV(0.04,10,-60000,0,0) = 486653.75 Total = 1837782.09 OR Total = PV(0.04,10,-60000,-2000000,0)= 1,837,782.08 (2) 6% cash paid 8% Discount Amortied Carrying Amount 1/1/2011 $1,800,000.00 6/30/2011 60000 $72,000.00 $12,000.00 $1,812,000.00 12/31/2011 60000 $72,480.00 $12,480.00 $1,824,480.00 Page 1...
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This note was uploaded on 03/27/2012 for the course ACCT 3312 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

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