Cole Inc. prepares the following effective interest amortization table for its bonds payable. Interest Payment Date Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 Dec 31, 2026 Dec 31, 2027 Dec 31, 2028 Dec 31, 2029 Dec 31, 2030 Cash Payment Amount $87,185 $840,000 $927,185 Decrease in Interest Expense Discount $840,000 $911,169 $71,169 $840,000 $916,151 $76,151 $840,000 $921,481 $81,481 $840,000 $927,185 $87,185 $840,000 $933,288 $93,288 $840,000 $939,818 $99,818 $474,210 $840,000 $106,805 $367,404 $840,000 $114,282 $253,123 $130,841 $0 $946,805 $954,282 Discount $912,133 $835,982 $754,501 $667,316 $574,028 $840,000 $962,281 $122,281 $840,000 $970,841 $130,841 Book Value $13,087,867 $13,164,018 How much CASH will the company pay related to bond interest in 2024? $13,245,499 $13,332,684 $13,425,972 $13,525,790 $13,632,596 $13,746,877 $13,869,159 $14,000,000
Cole Inc. prepares the following effective interest amortization table for its bonds payable. Interest Payment Date Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 Dec 31, 2026 Dec 31, 2027 Dec 31, 2028 Dec 31, 2029 Dec 31, 2030 Cash Payment Amount $87,185 $840,000 $927,185 Decrease in Interest Expense Discount $840,000 $911,169 $71,169 $840,000 $916,151 $76,151 $840,000 $921,481 $81,481 $840,000 $927,185 $87,185 $840,000 $933,288 $93,288 $840,000 $939,818 $99,818 $474,210 $840,000 $106,805 $367,404 $840,000 $114,282 $253,123 $130,841 $0 $946,805 $954,282 Discount $912,133 $835,982 $754,501 $667,316 $574,028 $840,000 $962,281 $122,281 $840,000 $970,841 $130,841 Book Value $13,087,867 $13,164,018 How much CASH will the company pay related to bond interest in 2024? $13,245,499 $13,332,684 $13,425,972 $13,525,790 $13,632,596 $13,746,877 $13,869,159 $14,000,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
9
Transcribed Image Text:BONDS QUESTION:
Cole Inc. prepares the following effective interest amortization table for its bonds
payable.
Interest
Payment
Date
Dec 31, 2021
Dec 31, 2022
Dec 31, 2023
Dec 31, 2024
Dec 31, 2025
Dec 31, 2026
Dec 31, 2027
Dec 31, 2028
Cash
Payment
Amount
$87,185
$840,000
$927,185
$840,000
$840,000
$840,000
$840,000
$840,000
Interest
Expense
Decrease
in
Discount Discount
$71,169
$76,151
$911,169
$916,151
$921,481
$927,185
$87,185
$933,288
$93,288
$840,000 $939,818 $99,818
$840,000 $946,805
$840,000
$954,282
$840,000
$962,281
$122,281
$840,000 $970,841 $130,841
$912,133
$835,982
$81,481 $754,501
$667,316
$574,028
$474,210
$106,805 $367,404
$114,282
$253,123
$130,841
$0
Book
Value
$13,087,867
$13,164,018
$13,245,499
$13,332,684
$13,425,972
Dec 31, 2029
Dec 31, 2030
A
How much CASH will the company pay related to bond interest in 2024?
$13,525,790
$13,632,596
$13,746,877
$13,869,159
$14,000,000
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