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1. Metro Company purchased $100,000, 10%, 5-year bonds on January 1, 20x1 when the market yield was 8.75%. Interest is payable on June 30 and January 1. The market value on December 31, 20x1 was $107,500 and all bonds were sold for $110,000 on January 1, 20x2 before the scheduled payment was made. 1. Using the Excel, compute the purchase price of the bonds on January 1, 20x1. 2. Using the Excel, prepare the amortization schedule for 5 years.

1. Metro Company purchased $100,000, 10%, 5-year bonds on January 1, 20x1 when the market yield was 8.75%. Interest is payable on June 30 and January 1. The market value on December 31, 20x1 was $107,500 and all bonds were sold for $110,000 on January 1, 20x2 before the scheduled payment was made. 1. Using the Excel, compute the purchase price of the bonds on January 1, 20x1. 2. Using the Excel, prepare the amortization schedule for 5 years.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Metro Company purchased $100,000, 10%, 5-year bonds on January 1, 20x1 when the market yield was 8.75%. Interest is payable on June 30 and January 1. The market value on December 31, 20x1 was $107,500 and all bonds were sold for $110,000 on January 1, 20x2 before the scheduled payment was made. 1. Using the Excel, compute the purchase price of the bonds on January 1, 20x1. 2. Using the Excel, prepare the amortization schedule for 5 years.
Transcribed Image Text:1. Metro Company purchased $100,000, 10%, 5-year bonds on January 1, 20x1 when the market yield was 8.75%. Interest is payable on June 30 and January 1. The market value on December 31, 20x1 was $107,500 and all bonds were sold for $110,000 on January 1, 20x2 before the scheduled payment was made. 1. Using the Excel, compute the purchase price of the bonds on January 1, 20x1. 2. Using the Excel, prepare the amortization schedule for 5 years.
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