2 8 9 0 1 6 Information given: The ECC District is preparing to sell bonds to improve their campus. The cost of the project is $900,000 and the bond market has recently been unpredictable. They are offering a $900,000 bond with a 6% interest rate payable annually. Maturity will be in 10 years. They need to consider 2 possible outcomes and need information for both. Case #1: The market interest rate at time of issuance is 6.5%. Proceeds from sale will be $850,000. Method of amortization is Straight Line. Case #2: The market interest rate at time of issuance is 5.75%. Proceeds from sale will be $916,760. Method of amortization is Effective. Round ALL answers to 2 decimal places. REQUIRED FOR POINTS: 1 Create a master/reference table for Case #1 with all the required information needed to prepare a schedule. 2 Create a bond amortization schedule using the Straight-line method of amortization for all 10 years. Include all columns on the schedule for the interest journal entry and the individual accounts and carrying value that would be presented on the Balance Sheet.
2 8 9 0 1 6 Information given: The ECC District is preparing to sell bonds to improve their campus. The cost of the project is $900,000 and the bond market has recently been unpredictable. They are offering a $900,000 bond with a 6% interest rate payable annually. Maturity will be in 10 years. They need to consider 2 possible outcomes and need information for both. Case #1: The market interest rate at time of issuance is 6.5%. Proceeds from sale will be $850,000. Method of amortization is Straight Line. Case #2: The market interest rate at time of issuance is 5.75%. Proceeds from sale will be $916,760. Method of amortization is Effective. Round ALL answers to 2 decimal places. REQUIRED FOR POINTS: 1 Create a master/reference table for Case #1 with all the required information needed to prepare a schedule. 2 Create a bond amortization schedule using the Straight-line method of amortization for all 10 years. Include all columns on the schedule for the interest journal entry and the individual accounts and carrying value that would be presented on the Balance Sheet.
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 32P
Related questions
Question
Transcribed Image Text:2
8
9
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1
6
Information given:
The ECC District is preparing to sell bonds to improve their campus. The cost of the project is $900,000 and the
bond market has recently been unpredictable. They are offering a $900,000 bond with a 6% interest rate
payable annually. Maturity will be in 10 years.
They need to consider 2 possible outcomes and need information for both.
Case #1: The market interest rate at time of issuance is 6.5%. Proceeds from sale will be $850,000. Method of
amortization is Straight Line.
Case #2: The market interest rate at time of issuance is 5.75%. Proceeds from sale will be $916,760. Method of
amortization is Effective.
Round ALL answers to 2 decimal places.
REQUIRED FOR POINTS:
1
Create a master/reference table for Case #1 with all the required information needed to prepare a schedule.
2
Create a bond amortization schedule using the Straight-line method of amortization for all 10 years. Include all
columns on the schedule for the interest journal entry and the individual accounts and carrying value that would be
presented on the Balance Sheet.
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