On October 1, 2023, Dejour Energy Inc. issued a $680,000, 7%, seven-year bond. Interest is to be
Question:
On October 1, 2023, Dejour Energy Inc. issued a $680,000, 7%, seven-year bond. Interest is to be paid annually each October 1.
Required
1. Calculate the issue price of the bond assuming a market interest rate of 8% on the date of the bond issue.
2. Using the effective interest method, prepare an amortization schedule similar to Exhibit 14.11.
Transcribed Image Text:
Period Ending Dec. 31/23 Jun. 30/24 Dec. 31/24 Jun. 30/25 Dec. 31/25 Jun. 30/26 Dec. 31/26 (A) (B) Cash Interest Paid $100,000 x 4% Period Interest Expense E x 5% $ 4,000 4,000 4,000 4,000 4,000 4,000 $24,000 $4,7461 4,7832 4,823 4,864 4,907 4,9543 $29,077 (C) Discount Amort. B-A $ 746 783 823 864 907 954 $5,077 (D) Discount Unamortized Carrying Value $100,000 - (D) $ 94,923 95,669 96,452 97,275 98,139 99,046 100,000 $5,077 4,331 3,548 2,725 1,861 954 -0-
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a PV of face amount Table 14A 1 PV of interest annuity Table 14A2 680000 7 47600 Using the ...View the full answer
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Related Book For
Fundamental Accounting Principles Volume 2
ISBN: 9781260881332
17th Canadian Edition
Authors: Kermit D. Larson, Heidi Dieckmann, John Harris
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