Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $83,000,000 of five-year, 8% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. This information has been collected in the Microsoft E Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Compute the following: A. The amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar. B. The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. %24 C. The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. D. The amount of the bond interest expense for the first year. Round your answer to the nearest dollar.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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### Complete Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense

**Scenario:**

Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $33,000,000 of five-year, 8% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. This information has been collected in a Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

**Tasks:**

- **A.** Compute the amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar.
  - Input box: $ [__________]
    
- **B.** Compute the amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.
  - Input box: $ [__________]

- **C.** Compute the amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.
  - Input box: $ [__________]

- **D.** Compute the amount of the bond interest expense for the first year. Round your answer to the nearest dollar.
  - Input box: $ [__________]

**Instructions:**
- Use the provided Excel file to perform calculations and analyze data.
- Ensure all answers are rounded to the nearest dollar for accuracy.

**Note:**
This exercise involves applying the interest method of amortization to calculate the financial aspects of bonds issued at a discount. Analyze how the discount impacts the interest expense and understand the accounting procedures involved in amortizing bond discounts.

**Diagrams/Graphs:**
- The image does not contain any diagrams or graphs.
Transcribed Image Text:### Complete Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense **Scenario:** Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $33,000,000 of five-year, 8% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. This information has been collected in a Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. **Tasks:** - **A.** Compute the amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar. - Input box: $ [__________] - **B.** Compute the amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. - Input box: $ [__________] - **C.** Compute the amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. - Input box: $ [__________] - **D.** Compute the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. - Input box: $ [__________] **Instructions:** - Use the provided Excel file to perform calculations and analyze data. - Ensure all answers are rounded to the nearest dollar for accuracy. **Note:** This exercise involves applying the interest method of amortization to calculate the financial aspects of bonds issued at a discount. Analyze how the discount impacts the interest expense and understand the accounting procedures involved in amortizing bond discounts. **Diagrams/Graphs:** - The image does not contain any diagrams or graphs.
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