Solution 7:
Computation of interest expense to be reported in 2017 income statement | ||||
Date | Cash Payment | Interest expense | Discount Amortization | Bond Carrying Value |
1-Jan-17 | $16,411,672 | |||
30-Jun-17 | $487,200 | $492,350 | $5,150 | $16,416,822 |
31-Dec-17 | $487,200 | $492,505 | $5,305 | $16,422,127 |
Total | $984,855 |
Solution 8:
Computation of carrying value of bond | ||||
Date | Cash Payment | Interest expense | Discount Amortization | Bond Carrying Value |
1-Jan-17 | $16,411,672 | |||
30-Jun-17 | $487,200 | $492,350 | $5,150 | $16,416,822 |
31-Dec-17 | $487,200 | $492,505 | $5,305 | $16,422,127 |
30-Jun-18 | $487,200 | $492,664 | $5,464 | $16,427,591 |
31-Dec-18 | $487,200 | $492,828 | $5,628 | $16,433,218 |
Carrying value on Dec 31, 2018 Balance Sheet = $16,433,218
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