solution:
(a)
A company issued 5years 6% bonds with par value $92000 and
received $89947.
The differnce amount is $92000-$89947 =$ 2053
therefore 2053 will be discount.
during the life of bonds the discount amount would be
amortized.
therefore anual amortizition = 2053/5 =410.6.3
the amount of interest expense for the first semi anual interest
period :
| iinterest on bonds(92000*6%*1/2) |
2760 |
| discount amortization(410.60/2) |
205.3 |
| total interest expense |
$2965 |
the amount of interest expense for the first semiannual interest
period is $2965.
(b)
FV=150000+12% *6% =10080
| date |
opening balance |
12%/2
|
|
|
|
|
| A |
B |
C |
D=B*C |
E=FV*C |
F=E-D |
CLOSING BALANCE |
|
30/6/2015
|
144481 |
6 |
8668 |
10080 |
1412 |
143069 |
| 31/12/2015 |
143069 |
6 |
8584 |
10080 |
1495 |
141574 |
| 30/6/2016 |
141574 |
6 |
8494 |
10080 |
1585 |
139988 |
| 31/12/2016 |
139988 |
6 |
8399 |
10080 |
1680 |
138307 |
| 30/6/2017 |
138307 |
6 |
8298 |
10080 |
1781 |
136525 |
| 31/12/2017 |
136525 |
6 |
8191 |
10080 |
1888 |
134636 |
| 30/6/2018 |
134636 |
6 |
8078 |
10080 |
2001 |
132634 |
| 31/12/2018 |
132634 |
6 |
7958 |
10080 |
2121 |
130512 |
| 30/6/2019 |
130512 |
6 |
7830 |
10080 |
2249 |
128262 |
| 31/12/2019 |
128262 |
6 |
7695 |
10080 |
2384 |
125872 |
the amount of interest expense for the first semiannual interest
period is $8668
