PDA

View Full Version : Bond computations: Straight-line amortization


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

_____________________

ma0641
Aug 11, 2015, 03:18 PM
You spent enough time to copy this, you could have answered half of it. PS. We don't do your homework. What are your answers?