Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. Issued $80,000,000 of three-year, 14% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. b. The amount of premium to be amortized for the first semiant ual interest payment period, using the interest method. Round to the nearest dollar. c. The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar. d. The amount of the bond interest expense for the first year. Round to the nearest dollar. Present Value of $1 at Compound Interest EXHIBIT 8 Periods 4% 0.96154 0.92456 0.88900 0.85480 0.82193 0.79031 0.75992 0.73069 472% 0.95694 0.91573 0.87630 0.83856 0.80245 0.76790 0.73483 0.70319 0.67290 0.64393 5% 0.95238 0.90703 0.86384 0.82270 0.78353 0.74622 0.71068 0.67684 0.64461 0.61391 5 % 6% 0.94787 0.94340 0.89845 0.89000 0.85161 0.83962 0.80722 0.79209 0.76513 0.74726 0.72525 0.70496 0.68744 0.66506 0.65160 0.62741 0.617630.59190 0.58543 0.55839 67% 0.93897 0.88166 0.82785 0.77732 0.72988 0.68533 0.64351 0.60423 0.56735 0.53273 7% 0.93458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 0.54393 0.50835 10% 11% 0.909090.90090 0.82645 0.81162 0.75131 0.73119 0.68301 0.65873 0.62092 0.59345 0.56447 0.56447053464 0.53464 0.51316 0.48166 0.46651 0.43393 0.42410 0.39092 0,38554035218 12% 0.89286 0.79719 0.71178 0.63552 0.56743 0.50663 0.45235 0.40388 0.36061 0.32197 19% 0.88496 0.78315 0.69305 0.61332 0.54276 0.48032 0.42506 0.37616 0.33288 0.29459 0.67556 EXHIBIT 10 Present Value of an Annuity of $1 at Compound Interest Periods 7% 0.93458 1.80802 2.62432 NOU 4% 0.96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 49% 15% 0.95694 0.95238 1.87267 1.85941 2.74896 2.72325 3.58753 3.54595 4.38998 4.32948 5.15787 5,07569 5.89270 5.78637 6.59589 6.46321 7.26879 7.10782 7.91272 7.72173 572% 0.94787 1.84632 2.69793 3.50515 4.27028 4.99553 5.68297 6.33457 6.95220 7.53763 6% 0.94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 6%% 0.93897 1.82063 2.64848 3.42580 4.15568 4.84101 5.48452 6,08875 6,65610 7.18883 4.10020 4.76654 5.38929 5.97130 6.51523 7.02358 10% 0.90909 1.73554 248685 3.16987 3.79079 4.35526 4.86842 533493 5.75902 6.14457 11% 12% 13% 0.90090 0.89286 0.88496 1.71252 1.69005 1.66810 2.44371 240183 2.36115 3.10245 3.03735 2.97447 3.69590 3.60478 3.51723 4.23054 4.11141 3.99755 4.712204.56376 4.42261 5.14612 4.96764 479677 5.53705 5.32825 5.13166 5.88923 5.650225.42624
