The folowing nformation apples to the questhons dsplayed below Coney bland Enter

Question

The folowing nformation apples to the questhons dsplayed below Coney bland Entertar ment issues S1600000 of 7% bons, die n t years, with merest p yeble sermannualy on June 30 and December 3, oach year Clculate the issue price of a bond and complete the first three rows of an amortization schedale when Required l 500 points Required at face amount lEY.ot S1.PV.GESS EVA ot, and PVAotst) (Use appropriate factortsj from the tables provided. Do not round interest rate factors.) 1,600 000 Oate Cash Paid Interest Increase in Expense Carrying Value Carrying Va 01/01 18 06/30 18 12 3110

Explanation / Answer

Req 1: Issue price: $1600,000 Date Cash paid Interest Increase in Carrying Expense Carrying Value Value 01.01.18 1,600,000 30.06.18 56000 56000 0 1,600,000 31.12.18 56000 56000 0 1,600,000 Req 2 Issue price: Present value of $56000* Annuity of 30 periods at 4%: 968,352 Present value of $1600,000*PVF at 4% on Period-30 493280 Issue Price 1,461,632 Date Cash paid Interest Increase in Carrying Expense Carrying Value Value 01.01.18 1,461,632 30.06.18 56000 58465 2465 1,464,097 31.12.18 56000 58564 2564 1,466,661 Req 3: Issue price: Present value of $56000* Annuity of 30 periods at 3%: 1,097,600 Present value of $1600,000*PVF at 3% on Period-30 659200 Issue Price 1,756,800 Date Cash paid Interest Decrease in Carrying Expense Carrying Value Value 01.01.18 1,756,800 30.06.18 56000 52704 3296 1,753,504 31.12.18 56000 52605 3395 1,750,109

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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