Question 1:

Hyatt Inc. issued a five-year, 8% instalment loan payable, with blended principal and interest payments due annually. The following instalment payment schedule is partially completed. Fill in the missing amounts. Round all amounts to the nearest dollar.

Interest Period	Cash Payment	Interest Expense	Reduction of Principal	Principal Balance
Issue date				$50,000
1	$12,523	$_________	$8,523	$41,477
2	$ ______	$3,318	$_________	$32,272
3	$_______	$_________	$9,941	$_______
4				$11,594
5				$0

Question 2:

Referring to the table in Question 1, What are the current and non-current (long-term) portions of the loan at the end of period 3 (i.e. what would be shown on the balance sheet in the current and non-current section)? (note: the year end balances of principal have been provided for years 4 & 5 for your information).

Current $ ________________

Non-current $ ______________

Question 3:

On March 1, 2014, SOFTER Corporation issued $100,000 of five-year, 4% bonds. The bonds pay interest semi-annually on September 1 and March 1. SOFTER`s year end is December 31 and it makes adjusting entries annually.

If the bonds were issued at 98, was the market rate of interest higher or lower than 4%? (please type either higher or lower) _______

If the bonds were issued at 98, were the bonds issued at a premium or a discount? (please type either premium or discount) _________

If the bonds had been issued at 102 how much would SOFTER have received, in total, from issuing the bonds? $__________

If the bonds had been issued at 102 how much interest would SOFTER pay on September 1, 2014? $______________