Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million on

Question:

Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million on January 1, 2011 for $283,294,720. The bonds mature in 2021 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

Required:

1. What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2011?

2. What would be the amount related to the bonds that Myriad would report in its income statement for the year ended December 31, 2011?

3. What would be the amount(s) related to the bonds that Myriad would report in its statement of cash flows for the year ended December 31, 2011?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...