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How to calculate in Excel? Bond Discount Problem: On January 1, 2017, Waterfall Lodge & Amusement Park issued $6,000,000 of 6% bonds, due in 10
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Bond Discount Problem:On January 1, 2017, Waterfall Lodge & Amusement Park issued $6,000,000 of 6% bonds, due in 10 years. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually on June 30 and December 31 each year.
Face amount | $ 6,000,000.00 | |
Interest payment | $ 180,000.00 | |
Market interest rate per period | 3.5% | |
Number of periods | 20 | |
Issue price | $ 5,573,627.90 |
Date | Cash Paid for Interest | Interest Expense | Increase in Carrying Value | Carrying Value (End of Period) | |
1/1/2017 | ------- | ------- | ------- | $ 5,573,627.90 | |
6/30/2017 | $ 180,000.00 | ||||
12/31/2017 | $ 180,000.00 | ||||
6/30/2018 | $ 180,000.00 | ||||
12/31/2018 | $ 180,000.00 | ||||
6/30/2019 | $ 180,000.00 | ||||
12/31/2019 | $ 180,000.00 | ||||
6/30/2020 | $ 180,000.00 | ||||
12/31/2020 | $ 180,000.00 | ||||
6/30/2021 | $ 180,000.00 | ||||
12/31/2021 | $ 180,000.00 | ||||
6/30/2022 | $ 180,000.00 | ||||
12/31/2022 | $ 180,000.00 | ||||
6/30/2023 | $ 180,000.00 | ||||
12/31/2023 | $ 180,000.00 | ||||
6/30/2024 | $ 180,000.00 | ||||
12/31/2024 | $ 180,000.00 | ||||
6/30/2025 | $ 180,000.00 | ||||
12/31/2025 | $ 180,000.00 | ||||
6/30/2026 | $ 180,000.00 | ||||
12/31/2026 | $ 180,000.00 |
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