Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 11, Problem 17E

A.

To determine

Calculate the amount of cash proceeds (present value) from the sale of the bonds.

B.

To determine

Calculate the amount of discount to be amortized for the first semiannual interest payment period.

C.

To determine

Calculate the amount of discount to be amortized for the second semiannual interest payment period.

D.

To determine

Determine the amount of bond interest expense for first year.

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Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $90,000,000 of four-year, 14% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. b. The amount of premium to be amortized for the first semiannual interest payment period, using the interest method. Round to the nearest dollar. c. The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar. d. The amount of the bond interest expense for the first year. Round to the nearest dollar. $
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $40,000,000 of five-year, 13% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $70,000,000 of five-year, 14% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. 4,900,000 X b. The amount of premium to be amortized for the first semiannual interest payment period, using the interest method. Round to the nearest dollar. 4,900,000 The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar. 4,900,000 X d. The amount of the bond interest expense for the first year. Round to the nearest dollar. 4,900,000 X Feedback Check My Work Remember, the selling price of a bond is the sum of the present values of:…

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Financial And Managerial Accounting

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