EXERCISE $1$

On January $1,2024,$ a company issues a $$2,500,000,10\%,5-$year bonds that pays

semiannual interest on July $1$ and January $1.$

$1.$ Assume the bonds were selling at:

A$.98\%$

B$.102\%$

Instructions:

$$ For A and B journalize the issuance of the bonds.

$$ Journalize the first and second interest payment, using straight line

amortization.

$2.$ Using Excel compute the bond$$s price $($present value$)$ assuming the following

market interest:

A$.12\mathrm{.}5\%$

B$.8\mathrm{.}5\%$

$3.$ Use Excel to prepare two amortization tables for the bond$$s A and B using the

effective interest method.

Use the following columnar headings:

Year, Payment, Interest Expense, Discount$/$Premium Amortization, Unamortized

Discount$/$Premium Amortization and Carrying Value.

$4.$ Journalize the following entries:

A$.$ Issuance of the bonds

B$.$ First two interest payment

EXERCISE $2$

Assume that you are going to buy a car and finance it with Oriental Bank. The car has a

price of $$35,500,$ a market interest rate is $3\mathrm{.}99\%$ and a loan term of $6$ years.

Instructions:

A$.$ Calculate the car monthly payment.

B$.$ Prepare the amortization table for the loan term.EXERCISE $1$

On January $1,2024,$ a company issues a $$2,500,000,10\%,5-$year bonds that pays

semiannual interest on July $1$ and January $1.$

$1.$ Assume the bonds were selling at:

A$.98\%$

B$.102\%$

Instructions:

$$ For A and B journalize the issuance of the bonds.

$$ Journalize the first and second interest payment, using straight line

amortization.

$2.$ Using Excel compute the bond$$s price $($present value$)$ assuming the following

market interest:

A$.12\mathrm{.}5\%$

B$.8\mathrm{.}5\%$

$3.$ Use Excel to prepare two amortization tables for the bond$$s A and B using the

effective interest method.

Use the following columnar headings:

Year, Payment, Interest Expense, Discount$/$Premium Amortization, Unamortized

Discount$/$Premium Amortization and Carrying Value.

$4.$ Journalize the following entries:

A$.$ Issuance of the bonds

B$.$ First two interest payment

EXERCISE $2$

Assume that you are going to buy a car and finance it with Oriental Bank. The car has a

price of $$35,500,$ a market interest rate is $3\mathrm{.}99\%$ and a loan term of $6$ years.

Instructions:

A$.$ Calculate the car monthly payment.

B$.$ Prepare the amortization table for the loan term.