Homepage . XLS0 x 3 McGrwHR Educat O ezto.mheducation.com/hm.1p G Els issues 75%

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Homepage . XLS0 x 3 McGrwHR Educat O ezto.mheducation.com/hm.1p G Els issues 75%. F. × / M Chapter 10mw Orange Correct-F K-G chegg study IOud, x x x Elaissues 7.5%, Sveyear bonds dated January 1, 2016. wih a S440,000 par vake. Thebonds pay iterest on Ane 30and December 31 and are issued atapeced $468,150. The anual maket rate is 6% onthe issue dne 1. Complete the below table to caloulate the total bond interest expense over the bonds" He. 10 payments of 1 Par value st maturity 165.000 Total nepaid 2 Prepare a straight-ine amortization table for the bonds ie 231/2016 123/20117 1231/2018 1231/2019 1231/002 Aa esc G Search or type URL

Explanation / Answer

2.

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Notes:

Bond premium = $468150 - $440000 = $28150

Amortization of bond premium = 28150 / 5 years = $5630 per year i.e. $2815 every six months

Carrying value of bonds will reduce by $2815 every six months

Carrying value on 01/01/2016 = Par value of bond + Premium = $440000 + $28150 = 468150

Semiannual Period-End Unamortized Premium Carrying Value 01/01/2016 28150 468150 06/30/2016 25335 465335 12/31/2016 22520 462520 06/30/2017 19705 459705 12/31/2017 16890 456890 06/30/2018 14075 454075 12/31/2018 11260 451260 06/30/2019 8445 448445 12/31/2019 5630 445630 06/30/2020 2815 442815 12/31/2020 0 440000

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