[cielbleu95]

I do not need the entire question answered, I just need help with the beginning after the semi-annual payments. I

Chapter 2 Problem 1
2. Bond computations: Straight-line amortization
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. Semiannual interest payments of $36000 = (900,000*8%*6/12)
• Case A—The bonds are issued at 100. 900,000 * 100% = 900, 000
• Case B—The bonds are issued at 96. 900,000 * 96% = 864, 000
• Case C—The bonds are issued at 105. 900,000 * 105% = 945, 000

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, 20X1 _______ _______ _______
e. Amortization for the year ended December 31, 20X1 _______ _______ _______
f. Unamortized premium as of December 31, 20X1 _______ _______ _______
g. Unamortized discount as of December 31, 20X1 _______ _______ _______
h. Bond carrying value as of December 31, 20X1 _______ _______ _______