Question
Christmas Anytime issues $720,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the
Christmas Anytime issues $720,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year.
Calculate the issue price of a bond and complete the first three rows of an amortization schedule when:
1a. The market interest rate is 6% and the bonds issue at face amount.
Issue Price=?
| Date | Cash Paid | Interest Expense | Increase in Carrying Value | Carrying Value |
|---|---|---|---|---|
| 01/01 | ||||
| 06/30 | ||||
| 12/31 |
1b. The market interest rate is 7% and the bonds issue at a discount.
issue price=?
| Date | Cash Paid | Interest Expense | Increase in Carrying Value | Carrying Value |
|---|---|---|---|---|
| 01/01 | ||||
| 06/30 | ||||
| 12/31 |
1c. The market interest rate is 5% and the bonds issue at a premium.
Issue price=?
| Date | Cash Paid | Interest Expense | Decrease in Carrying Value | Carrying Value |
|---|---|---|---|---|
| 01/01 | ||||
| 06/30 | ||||
| 12/31 |
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Management Accounting Evolution Not Revolution
Authors: Michael Bromwich, Al Bhimani
1st Edition
0908269137, 978-0908269136
