Data Analyst/ Qa Analyst
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At December 31, 2010 the following balances existed on the books of Rentro Corporation:
Bonds Payable
$1,500,000
Unamortized discount on Bonds Payable
120,000
Interest Payable
37,000
Unamortized Bond Issue Costs
90,000
If the bonds are retired on January 1, 2011, at 102, what will Rentro report as a loss on redemption?
$150,000
$202,500
$240,000
$277,500
Ans:
Reacquisition Price (1500, 000.00 * 102%)
= 1,530,000.00
Less: Net Carrying amount of bond redeemed
Par Value
1,500,000.00
Unamortized discount
= (120,000.00)
Unamortized Bond Issue Costs
= (90,000.00)
( 1,290,000.00)
240,000.00
Downing Company issues $5,000,000, 6%, 5-year bonds dated January 1, 2010 on January 1, 2010. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue?
Present value of a single sum for 5 periods
.88385
.86261
.78353
.74726
Present value of a single sum for 10 periods
.78120
.74409
.61391
.55839
Present value of an annuity for 5 periods
4.64583
4.57971
4.32948
4.21236
Present value of an annuity for 10 periods
8.75206
8.53020
7.72173
7.36009
$5,000,000
$5,216,494
$5,218,809
$5,217,308
7/9.
A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2010. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,145. Using effective-interest amortization, how much interest expense will be recognized in 2010?
$780,000
$1,560,000
$1,568,498
$1,568,332
Answer: 19604145 * 8% = 1568331.60
10/12.
On October 1, 2010 Macklin Corporation issued 5%,