SOLUTION:-
| Face Amount |
$ 2,00,000.00 |
|
|
|
| Rate |
8% |
|
|
|
| Period |
5 |
|
|
|
| PMT |
$12,000.00 |
|
|
|
|
Present Value=
PV (8%,5,-12,000,-200000)
|
$ 1,84,029.16 |
|
|
|
| Amortization Schedule |
|
|
|
|
| A |
B |
C |
D |
G |
| Period |
Cash
Received
|
Interest Revenue.=
8% * Previous BV in G
|
Amortisation
of bond discount
(B - C)
|
Book value of bond previous bal-D |
| Jan-16 |
|
|
|
$1,84,029.16 |
| Jan-17 |
$12,000.00 |
$14,722.33 |
$-2,722.33 |
$1,86,751.49 |
| Jan-18 |
$12,000.00 |
$14,940.12 |
$-2,940.12 |
$1,89,691.61 |
| Jan-19 |
$12,000.00 |
$15,175.33 |
$-3,175.33 |
$1,92,866.94 |
| Jan-20 |
$12,000.00 |
$15,429.36 |
$-3,429.36 |
$1,96,296.30 |
| Jan-21 |
$12,000.00 |
$15,703.70 |
$-3,703.70 |
$2,00,000.00 |
|
$60,000.00 |
$75,970,84 |
$-15,970.84 |
|
| What is the sale revenue that Zaid should recognize on Jan
1,2016? |
$1,84,029.16 |
|
|
|
| What is the interest revenue that Zaid should recognize on
Dec-31,2016 ? |
$14,722.33 |
|
|
|
| What is the Dis Amrt that Zaid should recognize on Dec
31,2018? |
$2,940.12 |
|
|
|
| What is the carrying value of the notes on Dec 31, 2019? |
$1,92,866.94 |
|
|
|
| What is the interest receivable related to the notes on Dec 31,
2020? |
$12,000.00 |
|
|
|
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