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    sagnik2422 Posts: 77, Reputation: 1
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    Feb 12, 2014, 01:10 PM
    Accounting Amortization Schedule Question
    Hi, I completed the entire amortization schedule but I think I went wrong somewhere because the last column I decreased in the increase in balance column. I rounded but even still it should increase I think.

    Question :
    When Patey Pontoons issued 6.50% bonds on January 1, 2011, with a face amount of $560,000, the market yield for bonds of similar risk and maturity was 7.50%. The bonds mature December 31, 2014 (4 years). Interest is paid semiannually on June 30 and December 31.

    Required : [FONT=Arial, Verdana, Helvetica, Arial Unicode MS][COLOR=#000000]Prepare an amortization schedule that determines interest at the effective rate each period[/COLOR][/FONT]
    For the last column I got 18,200 as cash payment, 20,773 as effective interest, 2573 as increase in balance and 560,000 as outstanding balance. For the prior column I got 18,200 as cash payment, 20,805.8 as effective interest, 2605.79 as increase in balance and 557,427 as outstanding balance

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