13.2 Start-run Inc. issued $600,000 of 10-year bonds with a stated rate of 11% when the...

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13.2 Start-run Inc. issued $600,000 of 10-year bonds with a stated rate of 11% when the market rate was 12%. The bonds pay interest semi-annually. Prepare the first three years of an amortization schedule. Assume that the bonds were issued for $565,710. Solution Points 10-year Cash Interest Payment Interest on Carrying Value Amortization Carrying of Discount Value Jan. 1, Year 1 .055 0.06 $565,710 June 30, Year 1 $33,000 33,943 (943) 564,767 Dec. 31, Year 1 $33,000 33,886 (886) 563,881 June 30, Year 2 $33,000 33,833 (833) 563,048 Dec. 31, Year 2 $33,000 33,783 (783) June 30, Year 3 $33,000 Dec. 31, Year 3 $33,000 13.2 Start-run Inc. issued $600,000 of 10-year bonds with a stated rate of 11% when the market rate was 12%. The bonds pay interest semi-annually. Prepare the first three years of an amortization schedule. Assume that the bonds were issued for $565,710. Solution Points 10-year Cash Interest Payment Interest on Carrying Value Amortization Carrying of Discount Value Jan. 1, Year 1 .055 0.06 $565,710 June 30, Year 1 $33,000 33,943 (943) 564,767 Dec. 31, Year 1 $33,000 33,886 (886) 563,881 June 30, Year 2 $33,000 33,833 (833) 563,048 Dec. 31, Year 2 $33,000 33,783 (783) June 30, Year 3 $33,000 Dec. 31, Year 3 $33,000