Question
Berj Corporation issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1, year 1. Interest
Berj Corporation issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1, year 1. Interest is payable at the end of each year. The bonds mature at the end of four years. The following schedule has been partially completed (amounts in thousands):
Cash Paid | Interest Expense | Amortization | Carrying Amount | |||||||||
January 1, year 1 | $ | 7,929 | ||||||||||
December 31, year 1 | $ | 663 | $ | 634 | $ | 29 | 7,900 | |||||
December 31, year 2 | 663 | ? | ? | 7,869 | ||||||||
December 31, year 3 | 663 | ? | ? | ? | ||||||||
December 31, year 4 | 663 | ? | ? | 7,800 | ||||||||
a) What was the maturity amount of the bonds? (Enter your answer in thousands of dollars.)
b) How much cash was received at the date of issuance (sale) of the bonds? (Enter your answer in thousands of dollars.)
c) What was the amount of discount or premium on the bond? (Enter your answer in thousands of dollars.)
1. Complete the amortization schedule. (Make sure that the unamortized discount/premium equals to ' 0 ' and the Net Liability equals to face value of the bond in the last period. Enter your answers in thousands of dollars. Round intermediate calculations and final answers to the nearest whole dollars. Enter all amounts as positive values.)
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