On May 1, 20xl Ben Corp. issue $110,000 of 8-year term bonds which were dated May 1, 20xl. The bonds pay interest semi-annually. The stated interest rate was 7% annually, and the bonds were issued to yield 6% annually. Required: 1.) Show that the semi-annual payment is $3,850. 2.) Show that the issue price of the bonds is $116,890. Use the present value tables distributed in class. 3.) Using the $116,890 value prepare an amortization schedule for the bonds through November 1, 20x3.

On May 1, 20xl Ben Corp. issue $110,000 of 8-year term bonds which were dated May 1, 20xl. The bonds pay interest semi-annually. The stated interest rate was 7% annually, and the bonds were issued to yield 6% annually. Required: 1.) Show that the semi-annual payment is $3,850. 2.) Show that the issue price of the bonds is $116,890. Use the present value tables distributed in class. 3.) Using the $116,890 value prepare an amortization schedule for the bonds through November 1, 20x3.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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