Question

I need the bottom part done

On January 1, 2021, Whispering Co. issued ten-year bonds with a face value of $4,900,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 10 periods at 10% Present value of 1 for 10 periods at 12% Present value of 1 for 20 periods at 5% Present value of 1 for 20 periods at 6% Present value of annuity for 10 periods at 10% Present value of annuity for 10 periods at 12% Present value of annuity for 20 periods at 5% Present value of annuity for 20 periods at 6% 0.386 0.322 0.377 0.312 6.145 5.650 12.462 11.470 Calculate the issue price of the bonds. Issue price of bond LINK TO TEXT Without prejudice to your solution in part (a), assume that the issue price was $4,331,600. Prepare the amortization table for 2021, assuming that amortization is recorded on interest payment dates using the effective interest method. Date Cash Expense Amortization Carrying Amount 1/1/18 6/30/18 12/31/18

Answer 1

Face value = $4,900,000

Semiannual interest : $4,900,000*10%*6/12 = $245,000

Market Rate = 12%, Semiannual = 6%

semi annual Payments = 10*2 =20

Issue Price of the Bond = 4,900,000*0.312+245,000*11.470 = $4,338,950

Issue Price = 4,338,950

Cash interest =4900000*10%*6/12 245000 Interest Expenses4331600*12%*6/12 259896 4346496*125*6/12 260790 Amortization Sechedule Interest Date Cash Paid Expense Amortization Carrying Value Jan-01 Jun-30 Dec-31 245000 245000 259896 260790 14896 15790 4331600 4346496 4362286