Question

Check my v 2 Myriad Solutions, Inc. issued 12% bonds, dated January 1, with a face amount of $390 million on January 1, 2021, for $348,683,634. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity the market yield is 14%. Interest is paid semiannually on June 30 and December 31. 0.6 points Required: Calculate the amounts related to the bonds that Myriad would report in its financial statements. (Round your answers to the nearest whole dollar.) eBook Print $ References Net liability Financing 352,997,251 348,683,634 S

Answer 1

Answer Net Liability $350,769,893 Carrying Value Net Proceeds from the Issue of Bond Financing $348,683,634 Calculation Discount on Bond = Face Value of Bonds - Issue Price of Bonds $390,000,000 - $348,683,634 $41,316,366 Cash Interest Paid (A) Period End 01/01/2021 06/30/2021 12/31/2021 Important Points: Cash Interest Bond Discount Interest Amortization Carrying Expense (B) (B - A) Value $348,683,634 $24,407,854 $1,007,854 $349,691,488 $24,478,404 $1,078,404 $350,769,893 $23,400,000 $23,400,000 $390,000,000 * 12*6 100 * 12 $23,400,000 *** Bond Interest Expense Carrying Value * Market Interest rate * 6/12 *** Closing Carrying Value = Beginning Carrying Value + Discount Amortization