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I need help with these and using the right formulas. Thank you. Tano Company issues bonds with a par value of $180,000 on January 1
I need help with these and using the right formulas. Thank you.
Tano Company issues bonds with a par value of $180,000 on January 1 of the current year. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,864. \begin{tabular}{|l|r|r|} \hline & & \\ \hline Par value & $180,000 & \\ \hline Contract rate & 8% & \\ \hline Term & 10% & years \\ \hline Market rate & $170,864 & \\ \hline Proceeds & 2 & \\ \hline Payments per year & & \\ \hline Required: & & \\ \hline \end{tabular} 1. What is the amount of the discount on these bonds at issuance? \begin{tabular}{|r|r|} \hline Discount & $9,136 \\ \hline \end{tabular} 2. How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: \begin{tabular}{|l|r|r|} \hline \multicolumn{1}{|c|}{ Par value at maturity } & $43,200 \\ \hline Total repaid & 180,000 \\ \hline Less amount borrowed & 223,200 \\ \hline Total bond interest expense & \\ \hline \end{tabular} 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization 3. Prepare a straight-line amortization table for these bonds. Amount of semi-annual discount amortization \begin{tabular}{|c|c|r|r|} \hline & \begin{tabular}{c} Semiannual \\ Period-End \end{tabular} & \multicolumn{1}{|c|}{\begin{tabular}{c} Unamortized \\ Discount \end{tabular}} & \begin{tabular}{c} Carrying \\ Value \end{tabular} \\ \hline(0) & 1/1/2023 & $9,136 & $170,864 \\ \hline(1) & 6/30/2023 & 7,614 & \\ \hline(2) & 12/31/2023 & & \\ \hline(3) & 6/30/2024 & & \\ \hline(4) & 12/31/2024 & & \\ \hline(5) & 6/30/2025 & & \\ \hline(6) & 12/31/2025 & & \\ \hline \end{tabular}Step by Step Solution
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