Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You should turn in your answers in ONE Ercel document. Use financial formulas in Ercel to show work for Requirement #1 and #5 of each

image text in transcribed
You should turn in your answers in ONE Ercel document. Use financial formulas in Ercel to show work for Requirement \#1 and \#5 of each part. An assignment submitted that doesn't demonstrate your formulas within Excel will receive an unsatisfactory grade. PARTA Sparty Corporation issued five-year, 11% bonds with a total face value of $2,000,000 on January 1,2022 . Interest is paid annually on December 31. The market rate of interest on this date was 9%. Sparty uses the effective interest rate method (the method we leamed in class). Required: 1. Using Excel, determine the proceeds of the bond sale on 1/1/22. 2. Using the present value of $1 table (found in Appendix E of your text or on-line) and the present value of an ordinary annuity of $1 table (found in Appendix E of your text or on-line), calculate the proceeds of the bond on 1/1/22. Be sure to show your work. Your calculations should be very close to what you calculated using Excel to answer \#1 above. Any difference should only be due to rounding. 3. Did this bond sell at a premium or discount? 4. Using Excel, prepare a five-year bond amortization schedule for these bonds. There are examples in your notes and posted on D2L. Use formulas and reference cells in Excel to show how you calculate your numbers. 5. Prepare joumal entries to record (1) the initial sale of the bonds on January 1, 2022, (2) the interest payment for the period ended December 31,2022 and, (3) the final interest and face value payment at maturity on December 31, 2026. 6. Show how the balance sheet would report the bond liability and related premium/discount on December 31, 2023. Fitint Create a T-Account for the premium/discount account to find the balance on 12/31/2023. The value of the liability on the balance sheet will be the face value plus/minus the balance of the premium/discount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions