ACC3303 Written Assignment #11 NOTE: 1. your solution is to be submitted via Blackboard by the deadline indicated 2. there are two parts to this assignment Part 1: Bond Payable Smith Company borrows cash by issuing a bond payable with the following terms: $10,000,000, 4% bond Issued on 1/1/20 Matures in 10 years Semi-annual interest payments on 6/30 and 12/31 of each year Market rate for bonds of this type was 6% at the time of their issue Required a. Compute the cash proceeds from the issuance of the bond. b. Create an effective interest amortization table in Excel for the entire life of the bond sing the following columns: payment number, payment date, beginning carrying value, effective interest rate, interest expense, cash (interest paid), discount/premium on bond payable (amortization amount), and ending carrying value. The goal of any bond amortization spreadsheet it to prove that, at the maturity date of the od to zero and the remaining carrying value of the bond is its face value the amount to be paid in full at maturity). These spreadsheets are important in practice because they serve as the basis for journal entries for every interest payment date and for adjusting journal entries at each year-end. E: You should use normal Excel calculations and formulas for the completion of this assignment. However, you are NOT allowed to use a pre-built Excel template- I want you to build this table from scratch on your own, c. Once your table is complete, tell me: What is the joumal entry on 1/1/20 to issue this bond? What is the joumal entry on 6/30/20, the first interest payment date? What is the journal entry on 12/31/20, the second interest payment date? ACC3303 Written Assignment #11 NOTE: 1. your solution is to be submitted via Blackboard by the deadline indicated 2. there are two parts to this assignment Part 1: Bond Payable Smith Company borrows cash by issuing a bond payable with the following terms: $10,000,000, 4% bond Issued on 1/1/20 Matures in 10 years Semi-annual interest payments on 6/30 and 12/31 of each year Market rate for bonds of this type was 6% at the time of their issue Required a. Compute the cash proceeds from the issuance of the bond. b. Create an effective interest amortization table in Excel for the entire life of the bond sing the following columns: payment number, payment date, beginning carrying value, effective interest rate, interest expense, cash (interest paid), discount/premium on bond payable (amortization amount), and ending carrying value. The goal of any bond amortization spreadsheet it to prove that, at the maturity date of the od to zero and the remaining carrying value of the bond is its face value the amount to be paid in full at maturity). These spreadsheets are important in practice because they serve as the basis for journal entries for every interest payment date and for adjusting journal entries at each year-end. E: You should use normal Excel calculations and formulas for the completion of this assignment. However, you are NOT allowed to use a pre-built Excel template- I want you to build this table from scratch on your own, c. Once your table is complete, tell me: What is the joumal entry on 1/1/20 to issue this bond? What is the joumal entry on 6/30/20, the first interest payment date? What is the journal entry on 12/31/20, the second interest payment date
