Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of

Question

Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $400 million on January 1, 2018, for $315,248,200. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity the market yield is 14%. Interest is paid semiannually on June 30 and December 31. Required: Complete the table below to calculate the amounts related to the bonds that Myriad would report in its financial statements. Indicate the amounts reported on the financial statements below for the year ending December 31, 2018.

Explanation / Answer

Period End Cash Interest Paid Bond Interest expense Discount Amortization Carrying value 1/1/2018 315248200 6/30/2018 20000000 22067374 2067374 317315574 12/31/2018 20000000 22212090 2212090 319527664 Balance Sheet: Net Liability 319527664 Income Statement Interest expense 44279464 Statement of cash flows Operating -40000000 Investing Financing 315248200

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.