On June 30, 2016, Singleton Computers issued 7 stated rate bonds with a face amount of $200 million The bonds mature on June 30, 2031 (15 years) The market rate of interest for similar bond issues was 6 (3 0 semiannual rate) Interest is paid semiannually (3 5 ) on June 30 and December 31, beginning on December 31, 2016 (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided ) Required 1 Determine the price of the bonds on June 30, 2016 Table values are based on n i Cash flow Amount Present Value Interest Principal Price of bonds $ 2 Calcualte the interest expense Singleton repots in 2016 for these bonds using the effective interest method Period End Cash interest paid Bond interest expnese Premium Amortization CarryingValue 06 30 2016 12 31 2016

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Question: On June 30, 2016, Singleton Computers issued 7% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2031

On June 30, 2016, Singleton Computers issued 7% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2031 (15 years). The market rate of interest for similar bond issues was 6% (3.0% semiannual rate). Interest is paid semiannually (3.5%) on June 30 and December 31, beginning on December 31, 2016. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:

Determine the price of the bonds on June 30, 2016.

Table values are based on:

n = ? i = ?

Cash flow Amount Present Value

Interest ? ?

Principal ? ?

Price of bonds $ ?

2. Calcualte the interest expense Singleton repots in 2016 for these bonds using the effective interest method.

Period End Cash interest paid Bond interest expnese Premium Amortization CarryingValue

06/30/2016 ?

12/31/2016 ? ?

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