On January 1, 2021, Ayayai Co. issued ten-year bonds with a face value of $6,500,000...
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Accounting
On January 1, 2021, Ayayai Co. issued ten-year bonds with a face value of $6,500,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:
Present value of 1 for 10 periods at 10%
0.386
Present value of 1 for 10 periods at 12%
0.322
Present value of 1 for 20 periods at 5%
0.377
Present value of 1 for 20 periods at 6%
0.312
Present value of annuity for 10 periods at 10%
6.145
Present value of annuity for 10 periods at 12%
5.650
Present value of annuity for 20 periods at 5%
12.462
Present value of annuity for 20 periods at 6%
11.470
Without prejudice to your solution in part (a), assume that the issue price was $5,746,000. Prepare the amortization table for 2021, assuming that amortization is recorded on interest payment dates using the effective-interest method.
Without prejudice to your solution in part (a), assume that the issue price was $5,746,000. Prepare the amortization table for 2021, assuming that amortization is recorded on interest payment dates using the effective-interest method.
Date
Cash
Expense
Amortization
Carrying Amount
1/1/18
6/30/18
12/31/18
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