E10-3 (Algo) Computing Issue Prices of Bonds Sold at Par, at a Discount, and at a Premium L010-2, 10-4, 10-5 LaTanya Corporation is planning to issue bonds with a face value of $102,500 and a coupon rate of 6 percent. The bonds mature in seven years. Interest is paid annually on December 31. All of the bonds will be sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required: Compute the issue (sales) price on January 1 of this year for each of the following independent cases: a. Case A: Market interest rate (annual): 6 percent. Issue price b. Case B: Market interest rate (annual): 4 percent. Issue price a. Case A: Market interest rate (annual): 6 percent. Issue price b. Case B: Market interest rate (annual): 4 percent. Issue price c. Case C: Market interest rate (annual): 7 percent. Issue price E10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Discount and Determining Reported Amounts LO10-4 On January 1 of this year, Ikuta Company issued a bond with a face value of $115,000 and a coupon rate of 4 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 5 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your answers to whole dollars.) Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Date Cash Interest Interest Expense Amortization Book Value of Bond Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31. Year 2 Dec. 31, Year 3 Required: 1. Complete a bond amortization schedule for all three years of the bond's life. Date Cash Interest Interest Expense Amortization Book Value of Bond Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? December 31 Year 1 Year 2 Interest expense Bonds payable E10-15 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium and Determining Reported Amounts LO10-5 On January 1 of this year, Houston Company issued a bond with a face value of $15,000 and a coupon rate of 6 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 5 percent. Houston uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to whole dollars.) Required: 1. Complete a bond amortization schedule for all three years of the bond's life. (Enter all values as positive values.) Date Cash Interest Interest Expense Amortization Book Value of Bond Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Requirea: 1. Complete a bond amortization schedule for all three years of the bond's life. (Enter all values as positive values.) Date Cash Interest Interest Expense Amortization Book Value of Bond Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31. Year 2 Dec. 31. Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? December 31 Year 1 Year 2 Interest expense Bond liability
