Super Splash issues $910,000, 7% bonds on January 1, 2021, that mature in 10 years. The...
Super Splash issues $910,000, 7% bonds on January 1, 2021, that mature in 10 years. The market interest rate for bonds of similar risk and maturity is 6%, and the bonds issue for $977,693. Interest is paid semiannually on June 30 and December 31.
Complete the first three rows of an amortization schedule. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)
Homework Answers
amortization table:
| date | cash interest | interest expense | premium amortized | carrying value |
|---|---|---|---|---|
| Jan 1, 2021 | $977693 | |||
| Jun 30, 2021 | $31850 | $29331 | $2519 | $975174 |
| Dec 31,2021 | $31850 | $29255 | $2595 | $972579 |
| Jun 30, 2021 | $31850 | $29177 | $2673 | $969906 |
cash interest = face value x coupon rate
interest expenses = carrying value x market interest rate
premium amortized = cash interest - interest expense
carrying value = previous carrying value - premium amortized
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