ACME Inc. would like assistance in relation to bond issuance and asks that you provide the following:

(1) An amortization schedule for the three different potential stated rates of the bond

(2) Your recommendation of which stated rate they should use when issuing the bonds and WHY. Any additional insights you have would be greatly appreciated.

ACME Inc. has decided to issue a 10- year, $3,000,000 bond with interest paid semiannually.

The market rate (yield) for bonds of similar risk and maturity is 10%.

ACME Inc. is considering a stated (coupon) rate 8%, 10%,or 12%

1. Complete the Bond Amortization Schedules for each of the three potential stated rates. Also indicate whether the bond would be issued at a premium, discount or face amount. Bond Amorization Schedule with Stated Rate of 8% Bond Amorization Schedule with Stated Rate of 10% Bond Amorization Schedule with Stated Rate of 12% Payment Payment Balance (Carrying Value) Cash Interest Payment Payment Interest Expense Interest Balance (Carrying Value) Cash Interest Payment Interest Expense Amortization Balance (Carrying Value) Cash Interest Payment Amortization Amortization Expense Beg. Balance Beg. Balance Beg. Balance 1 1 1 2 2 2 3 3 3 4 4 4 4 5 5 5 6 6 6 6 7 7 7 8 8 8 8 9 9 9 9 10 10 10 11 11 11 12 12 12 13 13 13 14 14 14 15 15 15 16 16 16 17 17 17 18 18 18 19 19 19 20 20 20 This bond would be issued at This bond would be issued at This bond would be issued at