Question
Information Related to Various Bond Issues) Karen Austin Inc. has issued three types of debt on January 1, 2020, the start of the company's fiscal
Information Related to Various Bond Issues) Karen Austin Inc. has issued three types of debt on January 1, 2020, the start of the company's fiscal year.
a. $10 million, 10-year, 15% unsecured bonds, interest payable quarterly. Bonds were priced to yield 12%.
b. $25 million par of 10-year, zero-coupon bonds at a price to yield 12% per year.
c. $20 million, 10-year, 10% mortgage bonds, interest payable annually to yield 12%.
Instructions
Prepare a schedule that identifies the following items for each bond: (1) maturity value, (2) number of interest periods over life of bond, (3) stated rate per each interest period, (4) effective-interest rate per each interest period, (5) payment amount per period and (6) present value of bonds at date of issue.
The question that I want to change: a) revised that the interest is payable quarterly; b and c the calculation for the mortgage payable is the same as for a bond payable
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