cmcmahon
Aug 10, 2015, 01:42 PM
Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow. · Case A—The bonds are issued at 100. · Case B—The bonds are issued at 96. · Case C—The bonds are issued at 105. Southlake uses the straight-line method of amortization. Instructions: Complete the following table:Case ACase BCase C
Cash inflow on the issuance date
_____________________
Total cash outflow through maturity
_____________________
Total borrowing cost over the life of the bond issue
_____________________
Interest expense for the year ended December 31, 20X1
_____________________
Amortization for the year ended December 31, 20X1
_____________________
Unamortized premium as of December 31, 20X1
_____________________
Unamortized discount as of December 31, 20X1
_____________________
Bond carrying value as of December 31, 20X1
_____________________
Cash inflow on the issuance date
_____________________
Total cash outflow through maturity
_____________________
Total borrowing cost over the life of the bond issue
_____________________
Interest expense for the year ended December 31, 20X1
_____________________
Amortization for the year ended December 31, 20X1
_____________________
Unamortized premium as of December 31, 20X1
_____________________
Unamortized discount as of December 31, 20X1
_____________________
Bond carrying value as of December 31, 20X1
_____________________