Date 1 1 13 6 30 13 12 31 13 6 30 14 12 31 14 6 30

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Unformatted text preview: onds. Date 1/ 1/ 13 6/ 30/ 13 12/ 31/ 13 6/ 30/ 14 12/ 31/ 14 6/ 30/ 15 12/ 31/ 15 Cash $ 42,000 42,000 42,000 42,000 42,000 42,000 $ 252,000 Effective Interest $ Increase in Balance 46,664 $ 46,991 47,340 47,714 48,114 48,544 * $ 285,367 $ 4,664 4,991 5,340 5,714 6,114 6,544 33,367 Outstanding Balance $ 666,633 671,297 676,288 681,628 687,342 693,456 700,000 * Rounded. $666,633 + $4,664 = $671,297 $666,633 + $4,664 = $671,297 14-6 Premium Amortization Schedule Here is a bond amortization schedule showing the cash interest, effective interest, premium amortization, and the carrying value of the bonds. Date 1/ 1/ 13 6/ 30/ 13 12/ 31/ 13 6/ 30/ 14 12/ 31/ 14 6/ 30/ 15 12/ 31/ 15 Cash $ 42,000 42,000 42,000 42,000 42,000 42,000 $ 252,000 Effective Interest $ Decrease in Balance 36,777 $ 36,515 36,241 35,953 35,651 35,329 * $ 216,467 $ 5,223 5,485 5,759 6,047 6,349 6,671 35,533 Outstanding Balance $ 735,533 730,310 724,825 719,066 713,020 706,671 700,000 * Rounded. $735,533 × 5% = $36,777 $735,533 × 5% = $36,777 $735,533 - $5,223 = $730,310 $735,533 - $5,223 = $730,310 14-7 Premium and Discount Amortization Compared 14-8 Zero­Coupon Bonds These bonds do not pay interest. T bonds...
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This document was uploaded on 02/16/2014 for the course ACC 311 at Cal Poly Pomona.

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