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Can anyone provide the excel pv formula for the starting carrying value? Can someone include the excel pv formula for the starting carrying values? 1
Can anyone provide the excel pv formula for the starting carrying value?
Can someone include the excel pv formula for the starting carrying values?
1 2 On January 1, 2021, Bobcat Company sold 10% bonds having a face value of $300,000 to yield 12% market rate. 3 The bonds are dated January 1, 2021 and mature in 5 years, with interest payable semiannually on July 1 and January 1 of each year, starting July 1, 2021 4 5 instructions 7 9 6 Prepare complete bond amortization schedules for Bobcat using the Excel templates on the following tabs. 8 Tab 1: Assume Bobcat allocates interest and unamortized discount or premium on the EFFECTIVE-INTEREST (EI) basis. Make sure to fill in dates as well. 10 Tab 2: Assume Bobcat allocates interest and unamortized discount or premium on the STRAIGHT-LINE (SL) basis. Make sure to fill in dates as well. 12 Notes Compute the present value of the bond using Excel formulas. All highlighted cells should be formulas. For example, cash interest payment should in 14 Questions Tab: Using your tables, answer the related questions on the question tab: 11 13 1 Cash Interest Payment Interest Expense Amortization Amount Carrying Value Of Bonds Date 2 3 4 5 6 Payment Number Start 1 2 3 4 5 9 10 11 7/1/2021 1/1/2022 7/1/2022 1/1/2023 7/1/2023 1/1/2024 W/1/2024 1/1/2025 7/1/2025 1/1/2026 $15,000 $15,000 $15,000 $15,000 $15,000 515,000 $15,000 $15,000 $15,000 $15,000 6 8 9 10 13 14 15 16 17 $150,000 SO SO E D G 1 F Carrying , Value Of Bonds Cash interest Payment 2 3 Interest Expense Amortization Amount Date 4 Payment Number Start 1 2 3 5 6 2 8 9 5 7/1/2021 1/1/2022 7/1/2022 1/1/2023 7/1/2023 1/1/2024 7/1/2024 1/1/2025 W/1/2025 1/1/2026 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 10 11 12 2 9 10 14 15 $150,000 SO SO 12 1 Questions - Excel Project Assignment 2 USE the information from Tabs 1 and 2 to answer the following two questions. 3 4 From the bond issuer's perspective, 5 (1) Which method of amortization causes interest expense to be higher in the beginning of the bond's term? Explain why? 6 7 8 9 10 11 12 13 14 15 16 17 (2) Which method would be preferred to smooth income? Explain why? 18 19 20 21 Step by Step Solution
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