Question

In: Accounting

Compute bond proceeds, amortizing premium by interest method, and interest expense Ware Co. produces and sells...

  1. Compute bond proceeds, amortizing premium by interest method, and interest expense

    Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware issued $28,000,000 of three-year, 11% bonds at a market (effective) interest rate of 8%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

    Compute the following:

    1. The amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar.

      $  

    2. The amount of premium to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.

      $  

    3. The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.

      $  

    4. The amount of the bond interest expense for the first year. Round your answer to the nearest dollar.

      $  

Compute bond proceeds, amortizing premium by interest method, and interest expense
DATA
Face amount of bonds $28,000,000
Contract rate of interest 11%
Term of bonds, years 3
Market rate of interest 8%
Interest payment Semiannual
Using formulas and cell references, perform the required analysis, and input your answers into the Amounts column. Transfer the numeric results for the green entry cells (C13:C16) into the appropriate fields in CNOWv2 for grading.
Amounts Formulas
a. PV of cash proceeds
b. Premium amortized for the 1st interest payment period
c. Premium amortized for the 2nd interest payment period
d. Interest expense for the 1st year

Solutions

Expert Solution


Related Solutions

Compute bond proceeds, amortizing premium by interest method, and interest expense Ware Co. produces and sells...
Compute bond proceeds, amortizing premium by interest method, and interest expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware issued $30,000,000 of five-year, 12% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Compute the following: The amount of cash...
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells...
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $90,000,000 of five-year, 12% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. b. The...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $85,000,000 of four-year, 8% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Compute the following: The amount of cash...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $72,000,000 of three-year, 9% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Compute the following: The amount of cash...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $84,000,000 of five-year, 7% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Compute the following: The amount of cash...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells...
Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $89,000,000 of three-year, 9% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Compute the following: The amount of cash...
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells...
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $80,000,000 of five-year, 9% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following, presenting figures used in your computations: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 5 and Exhibit 7. Round to...
Compute bond proceeds, amortizing premium by interest method, and interest expense DATA Face amount of bonds...
Compute bond proceeds, amortizing premium by interest method, and interest expense DATA Face amount of bonds $28,000,000 Contract rate of interest 11% Term of bonds, years 3 Market rate of interest 8% Interest payment Semiannual Using formulas and cell references, perform the required analysis, and input your answers into the Amounts column. Transfer the numeric results for the green entry cells (C13:C16) into the appropriate fields in CNOWv2 for grading. Amounts Formulas a. PV of cash proceeds b. Premium amortized...
Compute bond proceeds, amortizing discount by interest method, and interest expense DATA Face amount of bonds...
Compute bond proceeds, amortizing discount by interest method, and interest expense DATA Face amount of bonds $84,000,000 Contract rate of interest 7% Term of bonds, years 5 Market rate of interest 11% Interest payment Semiannual Using formulas and cell references, perform the required analysis, and input your answers into the Amount column. Transfer the numeric results for the green entry cells (C13:C16) into the appropriate fields in CNOWv2 for grading. Amount Formulas a. PV of cash proceeds b. Discount amortized...
Compute bond proceeds, amortizing discount by interest method, and interest expense DATA Face amount of bonds...
Compute bond proceeds, amortizing discount by interest method, and interest expense DATA Face amount of bonds $84,000,000 Contract rate of interest 7% Term of bonds, years 5 Market rate of interest 11% Interest payment Semiannual Using formulas and cell references, perform the required analysis, and input your answers into the Amount column. Transfer the numeric results for the green entry cells (C13:C16) into the appropriate fields in CNOWv2 for grading. Amount Formulas a. PV of cash proceeds b. Discount amortized...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT