contestada

Swifty Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Instructions:
Set up a schedule of interest expense and discount amortization under the straight-line method.
Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be computed.)

Respuesta :

Answer:

Find attached amortization schedule for the interest expense and discount amortization under both methods.

Explanation:

Under straight line the discount amortization per year is total discount on bonds payable divided by 5 years.

Under effective method, I first of all computed the yield to maturity on the bind using rate formula in excel, the discount amortization each is the interest expense minus the coupon payment.

Ver imagen abdulmajeedabiodunac

Otras preguntas