Question
Below is a portion of the amortization table related to the issuance of 20-year bonds from Zeroz Company (YOU DO NOT NEED TO COMPLETE THE
Below is a portion of the amortization table related to the issuance of 20-year bonds from Zeroz Company (YOU DO NOT NEED TO COMPLETE THE TABLE). The bonds were issued on January 1, 2004. The bonds pay interest twice a year on July 1 and January 1. The expiration date is January 1, 2024. At the time of issuance, the company did not incur any incidental cost (assume that the issuance costs were zero). The company closes books on December 31 of each year.
Number of Payments | Date | Cash Paid | Interest Expense | Amortization | Value in Books |
- | 1/1/04 = issue | ? | |||
1 | 06/30/04 | ? | ? | ? | ? |
. | . | . | . | . | . |
. | . | . | . | . | . |
. | . | . | . | . | . |
39 | 06/30/23 | ? | ? | 9,246 | ? |
40 | 12/31/23 | ? | ? | 9,615 | 1,000,000 |
TOTALS | 1,200,000 | 1,397,928 | 197,928 |
REQUIRED: Based on the information provided: a. Indicate the principal (maturity value) of the bonds. b. Determine the issuance price of the bonds on January 1, 2004. c. What amortization method is the company using? Explain briefly how you determined d. Determine the established semi-annual or coupon interest rate (coupon or stated interest rate). e. Determine the book value of the bond (book value or carrying amount) that will be reported in the Statement of Financial Position for the period ending June 30, 2023. f. Determine the semi-annual market interest rate as of 1/1/04 when the bonds were issued (effective interest rate). g. Determine the balance of the Current Share of the Long Term Debt (Current Maturity of Long-Term Debt) that will be reported in the Statement of Financial Position for the period ending December 31, 2022. h. Determine the interest expense that will be reported in the Statement of Income and Expenses for the year ending December 31, 2023. i. Make the necessary journal entries as of 12/31/23 and 1/1/24.
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ANSWER a Maturity value of the bonds 1000000 b Issuance price of the bonds 1000000 197928 802072 c A...Get Instant Access to Expert-Tailored Solutions
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