Business

FinanceQ&A LibraryLearning Objective 2: Issue bonds payable (discount); record interest payments andthe related bond amortization using the effective-interest method) Energy Ltd. is authorizedto issue $3,000,000 of 1%, 10-year bonds payable. On December 31, 2018, when the marketinterest rate is 8%, the company issues $2,400,000 of the bonds. Energy amortizes bond discountusing the effective-interest method. The semiannual interest dates are June 30 and December 31.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare a bond amortization table for the term of the bonds using Excel.3. Record the issuance of the bonds payable on December 31, 2018; the first semiannualinterest payment on June 30, 2019; and the second payment on December 31, 2019.Start your trial now! First week only $4.99!*arrow_forward*

Question

Learning Objective 2: Issue bonds payable (discount); record interest payments and

the related bond amortization using the effective-interest method) Energy Ltd. is authorized

to issue $3,000,000 of 1%, 10-year bonds payable. On December 31, 2018, when the market

interest rate is 8%, the company issues $2,400,000 of the bonds. Energy amortizes bond discount

using the effective-interest method. The semiannual interest dates are June 30 and December 31.

Requirements

1. Use the PV function in Excel to calculate the issue price of the bonds.

2. Prepare a bond amortization table for the term of the bonds using Excel.

3. Record the issuance of the bonds payable on December 31, 2018; the first semiannual

interest payment on June 30, 2019; and the second payment on December 31, 2019.

Tagged in

Business

Finance

Find answers to questions asked by students like you.

Q: Suppose that you will receive annual payments of $16,500 for a period of 10 years. The first payment...

A: Present value is the current worth of the future payments to be made at a specific interest rate. --...

Q: A four-year maturity deep discount coupon corporate bond with a required rate of return (YTM) of 12 ...

A: A zero-coupon bond is an interest-free loan pledge whose transactions instead of interest at a low d...

Q: Describe the revaluation model.

A: Introduction: The revaluation model stretches a business the option of carrying a fixed asset at its...

Q: An analyst has projected that a company will have assets of €2,000 at year-end and liabilities of €1...

A: The fund that is raised by the company from the shareholders is term as the owners’ equity. It inclu...

Q: What factors would result in property increasing in value over a holding period?

A: One holding period is the length of time a creditor retains or the time between purchasing and selli...

Q: Solve it early all subparts upvote. Handwriting or typed answer onlys Note:-not explain in excel ...

A: Amount = Principle* (1+ interest)^time where, Principle = borrowed amount Amount = Total to be repai...

Q: 2. A loan of P2,000 is made for a period of 13 months. from January 1 to-lanuary 31 the following ye...

A: Click to see the answer

Q: The following are various forms of arbitrage. 1)Fixed income arbitrage 2)Risk arbitrage 3)Covered in...

A: Arbitrage means taking a buy and sell position on an asset simultaneously, at different prices, to p...

Q: Find the following values (compounding/discounting occurs annually): A. An initial $500 compounded ...

A: Formula: