Northern Corporation issued $800,000 of 7% bonds on March 1, 20X8. 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 A Case B Case C
A. Cash inflow on the issuance date _______ _______ _______
B. Total cash outflow through maturity _______ _______ _______
C. Total borrowing cost over the life of the bond issue _______ _______ _______
D. Interest expense for the year ended December 31, 20X8 _______ _______ _______
E. Amortization for the year ended December 31, 20X8 _______ _______ _______
F. Unamortized premium as of December 31, 20X8 _______ _______ _______
G. Unamortized discount as of December 31, 20X8 _______ _______ _______
H. Bond carrying value as of December 31, 20X8 _______ _______ _______

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