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Please help! On January 1, 2018, Clear View Video, Incorporated issued $1,200,000 of $1,000 par value, 10%, 6-year bonds. Interest is payable semiannually each January
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On January 1, 2018, Clear View Video, Incorporated issued $1,200,000 of $1,000 par value, 10%, 6-year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1, 2018. The market rate of interest for similar non-convertible bonds on the date of the bond issue was 12%. The bonds were sold for $1,580,712, yielding an effective rate of 4%. Each bond is convertible into 80 shares of Clear View's $2 par value common stock. Assume that there is no beneficial conversion option. Read the requirements. Requirement a. Prepare the amortization table for the bond issue through January 1, 2021, assuming that Clear View uses the effective interest rate method of amortization. (Round each calculation to the nearest whole number and then use the rounded value for each subsequent calculation in the table.) Cash Effective Discount/Premium Carrying Date Interest Interest Amortization Value January 1, 2018 July 1, 2018 January 1, 2019 July 1, 2019 January 1, 2020 July 1, 2020 January 1, 2021Step by Step Solution
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