Homework Answers
Correct Answer--- (C) $91,743
|
Amortization table |
|||||
|
Period (In years) |
Cash payment |
Interest expense |
Premium on Bonds payable |
Carrying Value of Bond |
Bond premium balance |
|
Issued |
$ (680,519) |
$ 5,680,519 |
$(680,519) |
||
|
1 |
$ 550,000 |
$ 511,247* |
$ (38,753) |
$ 5,641,766 |
$(641,766) |
|
2 |
$ 550,000 |
$ 507,759 |
$ (42,241) |
$ 5,599,525 |
$(599,525) |
|
3 |
$ 550,000 |
$ 503,957 |
$ (46,043) |
$ 5,553,482 |
$(553,482) |
|
4 |
$ 550,000 |
$ 499,813 |
$ (50,187) |
$ 5,503,295 |
$(503,295) |
|
5 |
$ 550,000 |
$ 495,297 |
$ (54,703) |
$ 5,448,592 |
$(448,592) |
|
6 |
$ 550,000 |
$ 490,373 |
$ (59,627) |
$ 5,388,965 |
$(388,965) |
|
7 |
$ 550,000 |
$ 485,007 |
$ (64,993) |
$ 5,323,972 |
$(323,972) |
|
8 |
$ 550,000 |
$ 479,157 |
$ (70,843) |
$ 5,253,129 |
$(253,129) |
|
9 |
$ 550,000 |
$ 472,782 |
$ (77,218) |
$ 5,175,911 |
$(175,911) |
|
10 |
$ 550,000 |
$ 465,832 |
$ (84,168) |
$ 5,091,743 |
$ (91,743) |
|
11 |
$ 550,000 |
$ 458,257 |
$ (91,743) |
$ 5,000,000 |
$ 0 |
*680519.06 x 9%
Market interest is taken to be 9%.
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