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The Peg Corporation (TPC) issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1 2018.
The Peg Corporation (TPC) issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1 2018. The stated interest rate was payable at the end of each year The bonds mature at the end of four years. The following schedule has been prepared (amounts in thousands) January 1, 2018 End of year 2018$330 End of year 2019 End of year 2020 End of year 2821 $4,474.54 $313.22 330 330 336 $17.00 17.96 19.21 20.59 4,439.8e 4,420.59 4,408.88 309.44 Required: 1. Complete the amortization schedule. TIP: The switch in amortization from $17 to $20.59 in the final year is caused by rounding 2. What was the maturity amount (face valuej of the bonds? 3. How much cash was received at date of issuance of the bonds? 4. Was there a premium or a discount? If so, which and how much was it? 5. How much cash is paid for interest each period and will be paid in total for the full life of the bond issue? 6. What is the stated interest rate? 7. What is the market interest rate? 8. What amount of interest expense should be reported on the income statement each year? 9-a. How would the bonds be classified at end of 2019 and 2020? 9-b. At what net amount would they be reported
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