Acct 302 On January 1, 2021 the Nancy Company issued $100,000 of 12 bonds, dated January 1 Interest is payable semiannually on June 30 and December 31 The bonds mature in ten years The effective interest rate is 10 The issuance price is $112,463 Requirement 1 Using Excel software, prepare an Amortization Schedule for the 20 periods the bonds will be outstanding Use effective interest method of amortization Use the following headings for your amortization schedule Interest Amortization Unamortized Carrying Value Date Cash Paid Expense of Premium Premium of Bond MAKE SURE TO PROVIDED COLUMN TOTALS FOR THE CASH PAID, INTEREST EXPENSE, AND AMORTIZATION OF PREMIUM COLUMNS USE THE EFFECTIVE INTEREST METHOD OF AMORTIZATION FOR FULL CREDIT YOU MUST USE EXCEL FORMULAS FOR ALL NUMERICAL COLUMNS Requirement 2 Same information and requirements as requirement 1, except use the straight line method of amortization Requirement 3 Bonds with a face value of $700,000 and a stated interest rate of 12 are issued Interest is paid semiannually The bonds mature in 3 years The market yield for bonds of similar risk and maturity is 14 Compute the issuance price of the bonds using the financial calculator Identify the keys on the financial calculator and corresponding inputs for credit Requirement 4 ( AICPA Adapted) When a company exchanges a note for property, goods, or services, what value does it place on the note if it bears interest at a reasonable rate and is issued in a bargained transaction entered into at arms length Explain If it bears no interest and or is not issued in a bargained transaction entered into at arms length Explain Requirement 5 ( AICPA Adapted) On January 1, 2021, Husker Company issued 2,000 bonds of its 5 year, $1,000 face value, 11 bonds dated January 1 at an effective annual interest rate (yield) of 9 On December 31 st , Husker extinguished the 2,000 bonds early through acquisition in the open market for $1,980,000 Were the bonds issued at face value, at a discount, or at a premium Why Is the amount of interest expense for the bonds using the effective interest method of amortization higher in the first year or second year of the life of the bond issue Why Is the amount of interest expense higher or lower than the cash paid out for interest How is a gain or loss on early extinguishment of debt determined (Do not need to compute actual number) Does the early extinguishment of the bonds result in a gain or loss Why

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Acct  302 On January 1, 2021 the Nancy Company issued $100,000 of 12  bonds, dated January 1  Interest is payable semiannually on June 30 and December 31  The bonds mature in ten years  The effective interest rate is 10   The issuance price is $112,463  Requirement  1  Using Excel software, prepare an Amortization Schedule for the 20 periods the bonds will be outstanding  Use effective interest method of amortization  Use the following headings for your amortization schedule  Interest Amortization Unamortized Carrying Value Date Cash Paid Expense of Premium Premium of Bond MAKE SURE TO PROVIDED COLUMN TOTALS FOR THE CASH PAID, INTEREST EXPENSE, AND AMORTIZATION OF PREMIUM COLUMNS  USE THE EFFECTIVE INTEREST METHOD OF AMORTIZATION  FOR FULL CREDIT YOU MUST USE EXCEL FORMULAS FOR ALL NUMERICAL COLUMNS  Requirement  2  Same information and requirements as requirement  1, except use the straight line method of amortization  Requirement  3  Bonds with a face value of $700,000 and a stated interest rate of 12  are issued  Interest is paid semiannually  The bonds mature in 3 years  The market yield for bonds of similar risk and maturity is 14   Compute the issuance price of the bonds using the financial calculator   Identify the keys on the financial calculator and corresponding inputs for credit  Requirement  4  ( AICPA Adapted) When a company exchanges a note for property, goods, or services, what value does it place on the note  if it bears interest at a reasonable rate and is issued in a bargained transaction entered into at arms length  Explain  If it bears no interest and or is not issued in a bargained transaction entered into at arms length  Explain  Requirement  5  ( AICPA Adapted) On January 1, 2021, Husker Company issued 2,000 bonds of its 5 year, $1,000 face value, 11  bonds dated January 1 at an effective annual interest rate (yield) of 9   On December 31 st , Husker extinguished the 2,000 bonds early through acquisition in the open market for $1,980,000  Were the bonds issued at face value, at a discount, or at a premium  Why  Is the amount of interest expense for the bonds using the effective interest method of amortization higher in the first year or second year of the life of the bond issue  Why  Is the amount of interest expense higher or lower than the cash paid out for interest  How is a gain or loss on early extinguishment of debt determined  (Do not need to compute actual number)  Does the early extinguishment of the bonds result in a gain or loss  Why

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Acct. 302 On January 1, 2021 the Nancy Company issued $100,000 of 12% bonds, dated January 1. Interest is payable semiannually on June 30 and

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