Compute bond proceeds, amortizing discount by interest method, and interest expense

Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $88,000,000 of three-year, 10% bonds at a market (effective) interest rate of 13%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Compute the following:

1. The amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar.

   $

2. The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.

   $

3. The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.

   $

4. The amount of the bond interest expense for the first year. Round your answer to the nearest dollar.

   $

Compute bond proceeds, amortizing discount by interest method, and interest expense
DATA
Face amount of bonds		$88,000,000
Contract rate of interest		10%
Term of bonds, years		3
Market rate of interest		13%
Interest payment		Semiannual
Using formulas and cell references, perform the required analysis, and input your answers into the Amount column. Transfer the numeric results for the green entry cells (C13:C16) into the appropriate fields in CNOWv2 for grading.
		Amount	Formulas
a.	PV of cash proceeds
b.	Discount amortized for the 1st interest payment period
c.	Discount amortized for the 2nd interest payment period
d.	Interest expense for the 1st year