Compute Bond Proceeds, Amortizing Discount by Interest Method,and Interest Expense
Boyd Co. produces and sells aviation equipment. On the first dayof its fiscal year, Boyd issued $80,000,000 of five-year, 9% bondsat a market (effective) interest rate of 12%, with interest payablesemiannually. Compute the following, presenting figures used inyour computations:
a. The amount of cash proceeds from the sale ofthe bonds. Use the tables of present values in Exhibit 5 andExhibit 7. Round to the nearest dollar.
$fill in the blank 1
b. The amount of discount to be amortized forthe first semiannual interest payment period, using the interestmethod. Round to the nearest dollar.
$fill in the blank 2
c. The amount of discount to be amortized forthe second semiannual interest payment period, using the interestmethod. Round to the nearest dollar.
$fill in the blank 3
d. The amount of the bond interest expense forthe first year. Round to the nearest dollar.
$fill in the blank 4
