FFB sold bonds at the beginning of the year on June 1, 2014. The bonds had a fac

Question

FFB sold bonds at the beginning of the year on June 1, 2014. The bonds had a face value of $2,000 and payments of $50 each due on December 1 and June 1. (The contract or stated rate = 5%, annual). The bonds sold on the market on June 1, 2014, to yield investors a 6% annual rate of return.

Prepare an amortization table for the bond. Use Excel. Consider the fact that liabilities have increased and that interest expense for the fiscal year 2015 has also increased due to the debt. The amount of interest for the year will be shown on your amortization table.

Explanation / Answer

FV 2000 Bond amortization table NPER 2 (1 x 2) Time Cash Paid Interest Expense Discount amortization Carrying Value PMT 50 June 1, 2014 $          1,980.87 Rate 3% (6%/2) Dec 1, 2014 50                         59.43                                      9.43              1,990.30 PV(Price) ($1,980.87) June 1, 2015 50                         59.71                                      9.71              2,000.00 =PV(3%,2,50,2000)

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.