Question

NEXT Exercise 14-19 (Part Level Submission) On June 30, 2013, Blue Spruce United issued 12 bonds with a par value of $813,000 due in 20 years. They were issuedt 98 and were collable 104 at any date after June 30, 2020. Because of lower interest rates and a significant change in the company's credit rating, it was decided to call the entire issue on June 30, 2020, and to issue new bonds. New 10% bonds were sold in the amount of $1,016,000 at 102; they mature in 20 years. The company follows IFRS and uses the effective Interest method. The interest payment dates are December 31 and June 30 of each year Your answer is partial correct. Try again. to decimal places, . 1251 and final anawers Prepare an effective interest table for the bonds for the inception of the bond to the date of the redemption (Round Interest rate was ecimal places, ... 52.75.) Schedule of Bond Discount Amortization Effective Interest Method Interest Amortired Carrying Dec. 31 2015 June 30 2016 Dec 31 2016 June 30 2017 Dec 31 2017 MacBook Air

Answer 1

First of all,we will calculate the YTM Face value Annual Coupon Rate Years to maturity Payment Frequency Price of Bond YTM RATE(C35*C36,C34/C36*C33,-C37,C33) 813000 12.00% 7.0 2 796740 6.218% Cash Paid @6% on Face Value (1) Carrying Amount(4) Discount Amortization (2) (1-2) =(3) 42 Date 43 44 June 30 2013 45 Dec. 31, 2013 46 June 30 2014 47 Dec. 31,2014 48 June 30 2015 49 Dec. 31, 2015 50 June 30 2016 51 Dec. 31,2016 52 June 30 2017 53 Dec. 31, 2017 54 June 30 2018 55 Dec. 31, 2018 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 48,780.00 49,541.29 49,588.63 49,638.91 49,692.32 49,749.05 49,809.30 49,873.30 49,941.28 50,013.49 50,090.19 50,171.66 761.29 808.63 858.91 912.32 969.05 1,029.30 1,093.30 1,161.28 1,233.49 1,310.19 1,391.66 796,740 797,501.29 798,309.92 799,168.83 800,081.15 801,050.20 802,079.50 803,172.80 804,334.08 805,567.57 806,877.76 808,269.42