What is the Cash Interest Paid? Please show solutions. On June 30, 2018, Singlet
ID: 2414215 • Letter: W
Question
What is the Cash Interest Paid? Please show solutions.
On June 30, 2018, Singleton Computers issued 6% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2033 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual ate). Interests paid semiannually (3%) on June 30 and December 31, beginning on December 31, 2018. (FV of$1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) on Thebonds and P ADors (use ap andDecember31, beginning on Dend sues was 5%(2.5% Required: 1. Determine the price of the bonds on June 30, 2018. 2. Calculate the interest expense Singleton reports in 2018 for these bonds using the effective interest method. Complete this question by entering your answers in the tabs below. Required 1Required 2 Calculate the interest expense Singleton reports in 2018 for these bonds using the effective interest method. (Enter your answers in whole dollars. Round your final answers to nearest whole dollar amount.) Cash Interest Bond Interest Premium ExpenseAmortization Carrying Value $220,929,740 0 Period-End Paid 06/30/2018 12/31/2018 5,523,244 S (5,523,244)Explanation / Answer
Req 1: Face Value of Bonds 200,000,000 Stated rate of interest 6% Market rate of interest 5% Cash Semi annually @3% 6,000,000 Annuity factor at 2.5% for 30 periods 20.9303 Present value factor at 2.5% of Period-30th 0.4767 Present value of Interest 125581800 Present value of Maturity amount 95340000 Issue price 220921800 Req 2: Period end Cash Bond Int. Premium Carrying Interest Expense Amortizew Value 30.06.18 20,921,800 220,921,800 31.12.18 6,000,000 5523045 476,955 220,444,845 Cash interest paid: $ 6000,000 Interest expense of 2018: $ 5523,045
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.