Question

In: Accounting

On April 1, 2018, Windel Corporation issued bonds with detachable warrants. Information related to these bonds...

On April 1, 2018, Windel Corporation issued bonds with detachable warrants.

Information related to these bonds is shown below:

Face value of bonds $325,000

Stated rate of interest 8%

Bonds issued at 106%

Each $1,000 bond was sold with 20 detachable warrants

Each warrant allowed the investor to purchase one share of common stock for $16

The par value of the common stock is $4.00

On April 1, 2018 the market values were:

Common stock $12

Warrants $7

In February 2023, some of the warrants were exercised. The percentage of warrants exercised was 20%

Bond #2: On January 1, 2016, Windel sold the following bonds:

Maturity value $850,000

Stated rate of interest 9%

Effective rate of interest 8%

Interest is paid each December 31

Maturity date January 1, 2021

On December 31, 2018, Windel redeemed (called) some of the bonds:

Call premium 105%

Percentage of bonds redeemed 40%

Required:

a. With respect to Bond #2:

1. Prepare an amortization schedule for the bonds.

Solutions

Expert Solution

Amortization schedule for the bond B

.

ekkarill92 answered 5 months ago
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