Question
On January 1, 2015 FSU issued 4%, 5 year bonds with a face amount of 50 million dollars to fund the renovation of the Gym
On January 1, 2015 FSU issued 4%, 5 year bonds with a face amount of 50 million dollars to fund the renovation of the Gym building (and 12 new volleyball courts). The market yield for bonds of similar risk and maturity was 5%. Interest is paid semiannually on June 30 and December 31.
1. Prepare a bond discount amortization schedule assuming the straight-line method was used.
2. Now assume the contract rate was 5%, the market rate was 4%. Prepare a bond premium amortization schedule assuming the straight-line method was used.
Include all 10 payments in the table
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