Billabong Inc. needed financing to build a new plant. On June 30th, 2012, Billabong issued $1,000,000 of 10-year bonds with a 10% coupon rate (payments due on December 31st and June 30^th). The effective interest rate (i.e. yield) was 8%. Use the financial statement effects template below to record the bond issue and Billabongs first interest payments. PLEASE SHOW YOUR CALUCLATIONS IN EXCEL. Please use the EXCEL Sheet provided and make the appropriate adjustments for your present value calculations. Tip: The cells in Yellow need adjustment.

E19 X fic = 1000000*0 H J K L M N O Initial Valuation Balance at End of Period Face-G #DIV/0! 20 19 18 17 16 15 14 0.00 13 E F _) required by the lender: Cash Premium Payment, amortization, Premium balance, prior Face* __% D-E D balance - F #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! #DIV/0! 12 B D 1 ASSUME: Stated Interest Rate ( is than the Yield 2 2 Period Year Interest Expense 3 for Period, 4 Balance at Beginning of Period H* % 5 0 2012 #DIV/0! 6 Dec 2012 #DIV/0! #DIV/0! 7 June 2013 #DIV/0! #DIV/0! 8 Dec 2013 #DIV/0! #DIV/0! 9 June 2014 #DIV/0! #DIV/0! 10 Dec 2014 #DIV/0! #DIV/0! 11 June 2015 #DIV/0! #DIV/0! 12 Dec 2015 #DIV/0! #DIV/0! 13 June 2016 #DIV/0! #DIV/0! 14 Dec #DIV/0! #DIV/0! 15 June 2017 #DIV/0! #DIV/0! 16 Dec 2017 #DIV/0! #DIV/0! 17 June 2018 #DIV/0! #DIV/0! 18 Dec 2018 #DIV/0! #DIV/0! 19 2019 #DIV/0! #DIV/0! 20 Dec 2019 #DIV/0! #DIV/0! 21 June 2020 #DIV/0! #DIV/0! 22 Dec 2020 #DIV/0! #DIV/0! 2021 #DIV/0! #DIV/0! 24 Dec 2021 #DIV/0! #DIV/0! 25 June 2022 #DIV/0! #DIV/0! 26 27 28 Valuation at Repurchase 2016 11 10 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 9 June 8 7 6 5 4 3 2 23 June 1 0 Annuity Factor Annuity Factor at repurchase #DIV/0! #DIV/0! 29 Present Value factor Present Value factor at repurchase 30 31 1 1 32