For each semiannual period, complete the table below to calculate the cash payme
ID: 2491501 • Letter: F
Question
For each semiannual period, complete the table below to calculate the cash payment
For each semiannual period, complete the table below to calculate the straight-line premium amortization. (Round "Unamortized Premium" to whole dollar and use the rounded value for part 4 & 5.)
For each semiannual period, complete the table below to calculate the bond interest expense.
Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
Prepare the first two years of an amortization table using the straight-line method
Record the first interest payment on June 30, 2015.
Record the second interest payment on December 31, 2015.
For each semiannual period, complete the table below to calculate the bond interest expense.
Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
Prepare the first two years of an amortization table using the straight-line method
Record the first interest payment on June 30, 2015.
Record the second interest payment on December 31, 2015.
Explanation / Answer
Par(maturity value) Annual rate Year Semiannual cash interest payment 1200000 X 8% / 2 = 48000 Bond price Par(maturity value) Premium on Bonds Payable Semiannual periods Straight line premium amortization 1468794 - 1200000 = 268794 / 30 = 8960 Seminannual cash payment Premium amortization Bond Interest expense 48000 - 8960 = 39040 Amount Repaid: 30 payments of interest 48000 1440000 (+) par value at maturity 1200000 Total Repaid 2640000 (-)Amount borrowed 1468794 Total Bond interest 1171206 Semi annual period end Unamortised Premium Carrying Value 268794 1468794 30-06-15 259834 1459834 31-12-15 250874 1450874 30-06-16 241915 1441915 31-12-16 232955 1432955 June 30 , 2015 Interest Expense 39040 Premium on Bonds payable 8960 To Cash 48000 Dec 31 , 2015 Interest Expense 39040 Premium on Bonds payable 8960 To Cash 48000
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