On May 1, 20xl Ben Corp. issue $110,000 of 8-year term bonds which were dated May 1, 20xl. The bonds pay interest semi-annually. The stated interest rate was 7% annually, and the bonds were issued to yield 6% annually. Required: 1.) Show that the semi-annual payment is $3,850. 2.) Show that the issue price of the bonds is $116,890. Use the present value tables distributed in class. 3.) Using the $116,890 value prepare an amortization schedule for the bonds through November 1, 20x3.
On May 1, 20xl Ben Corp. issue $110,000 of 8-year term bonds which were dated May 1, 20xl. The bonds pay interest semi-annually. The stated interest rate was 7% annually, and the bonds were issued to yield 6% annually. Required: 1.) Show that the semi-annual payment is $3,850. 2.) Show that the issue price of the bonds is $116,890. Use the present value tables distributed in class. 3.) Using the $116,890 value prepare an amortization schedule for the bonds through November 1, 20x3.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.5DC
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