Problem #1: Bonds 6% FACTS: Number of bonds Par value of each bond Stated interest rate Issue date D

Problem #1: Bonds 6% FACTS: Number of bonds Par value of each bond Stated interest rate Issue date Due date Call % Called on 500 Effective interest rate 1,800 Interest Paid Per Year 4% Payment dates 1/1/20X2 12/31/20X6 Years to maturity 102% 1/1/X6 January 1st July 1st 1.) The value (not par value) of the bond at issue date is what? 2.) At each interest payment date cash is increased (just type the amount) or decreased (type in using a minus sign such as -100) by this amount: 3.) Interest expense at the SECOND interest payment date is: 4.) Amortization of the discount/premium at the THIRD interest payment date is: 5.) At the date of call the reacquisition price of the bond is what? 6.) At the date of call the journal entry required to extinguish the debt early has what impact on net income? Input the numeric amount. It if increases net income just input the amount. If it decrease net income use a minus sign such as -100. If there is no impact on net income input the number zero. 7.) At the date of call the unamortized bond discount or premium is what amount?

 

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