Three different bond issuances are listed here with interest payments made semiannually: (a) Compute the proceeds of

Question:

Three different bond issuances are listed here with interest payments made semiannually:

Stated Effective Bond Issuance Face Value Interest Rate Interest Rate Life S100,000 S400,000 S600,000 6% 6% 10 years 10

(a) Compute the proceeds of each bond issuance.
(b) For each bond issuance, indicate whether the balance sheet value of the bond liability will increase, decrease, or remain constant over the life of the bond.
(c) For each bond issuance, indicate whether the interest expense recognized each period will increase, decrease, or remain constant over the life of the bond.

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...