P13-1 The initial proceeds per bond, the size of the issue, initial maturity of the bond, and the years remaining to maturity are shown in following table for a number of bonds.

Each bond has a $1,000 par value, and the issuing firm, is in the 35% tax bracket.

Bond

Proceeds per Bond

Size of Issue

Initital Maturity of Bond

Years Remaining to Maturity

A

$975

50,000 Bonds

10 Years

5 Years

B

1,020

25000 Bonds

20 Years

15 Years

D

1,000

100000 Bonds

25 Years

12 Years

a. Indicate whether each bond was sold at a discount, at a premium, or at its par value.

b. Determine the total discount or premium for each issue.

c. Determine the annual amount of discount or premium amortized for each bond.

d. Calculate the unamortized discount or premium for each bond.

e. Determine the after-tax cash flow associated with the retirement now of each of these bonds, using the values developed in part (d).