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Computing Bond Issue Price and Preparing an Amortization Table in Excel On December 31, 2021, Kaplan, Inc., issues $600.000 of 9% bonds that pay interest semiannually and mature in 10 years (December 31, 2031). a. Using the Excel PV worksheet function, compute the issue price assuming that the bonds' market rate is 8% per year compounded semiannually. (Refer to Appendix A for illustration.) Round answer to two decimal places. Issue price $0 x b. Prepare an amortization table in Excel to demonstrate the amortization of the book (carrying) value to the $600.000 maturity value at the end of the 20th semiannual period. (Refer to Appendix A for illustration.) The amortization schedule can be completed using the following Excel template: Amortization Schedule Using the figures from the amortization schedule created in Excel, complete the amortization schedule below for 2022 Enter answers using two decimal places. Beginning balance Date Period 0 1/1/22 6/30/22 1 $ 27,000 x s 12/31/22 2 0x Payment 27,000 $ 27,000 ✓ Interest Premium amortization 0x s 0x 0x ox S Premium balance 24,000 x $ 0x 0 x Book value 0x 0x 0x

Computing Bond Issue Price and Preparing an Amortization Table in Excel On December 31, 2021, Kaplan, Inc., issues $600.000 of 9% bonds that pay interest semiannually and mature in 10 years (December 31, 2031). a. Using the Excel PV worksheet function, compute the issue price assuming that the bonds' market rate is 8% per year compounded semiannually. (Refer to Appendix A for illustration.) Round answer to two decimal places. Issue price $0 x b. Prepare an amortization table in Excel to demonstrate the amortization of the book (carrying) value to the $600.000 maturity value at the end of the 20th semiannual period. (Refer to Appendix A for illustration.) The amortization schedule can be completed using the following Excel template: Amortization Schedule Using the figures from the amortization schedule created in Excel, complete the amortization schedule below for 2022 Enter answers using two decimal places. Beginning balance Date Period 0 1/1/22 6/30/22 1 $ 27,000 x s 12/31/22 2 0x Payment 27,000 $ 27,000 ✓ Interest Premium amortization 0x s 0x 0x ox S Premium balance 24,000 x $ 0x 0 x Book value 0x 0x 0x

Essentials Of Investments
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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Computing Bond Issue Price and Preparing an Amortization Table in Excel On December 31, 2021, Kaplan, Inc., issues $600,000 of 9% bonds that pay interest semiannually and mature in 10 years (December 31, 2031). a. Using the Excel PV worksheet function, compute the issue price assuming that the bonds' market rate is 8% per year compounded semiannually. (Refer to Appendix A for illustration.) Round answer to two decimal places. Issue price $0 b. Prepare an amortization table in Excel to demonstrate the amortization of the book (carrying) value to the $600,000 maturity value at the end of the 20th semiannual period. (Refer to Appendix A for illustration.) The amortization schedule can be completed using the following Excel template: Amortization Schedule x Using the figures from the amortization schedule created in Excel, complete the amortization schedule below for 2022 Enter answers using two decimal places. Date Period 1/1/22 0 6/30/22 1 $ 12/31/22 2 Beginning balance 27,000 * $ 0 x Payment 27,000 ✓ $ 27,000 ✓ Interest Premium amortization 0 x $ 0 x 0 x 0 x $ Premium balance 24,000 * $ 0x 0 x Book value 0x 0 x 0 x
Transcribed Image Text:Computing Bond Issue Price and Preparing an Amortization Table in Excel On December 31, 2021, Kaplan, Inc., issues $600,000 of 9% bonds that pay interest semiannually and mature in 10 years (December 31, 2031). a. Using the Excel PV worksheet function, compute the issue price assuming that the bonds' market rate is 8% per year compounded semiannually. (Refer to Appendix A for illustration.) Round answer to two decimal places. Issue price $0 b. Prepare an amortization table in Excel to demonstrate the amortization of the book (carrying) value to the $600,000 maturity value at the end of the 20th semiannual period. (Refer to Appendix A for illustration.) The amortization schedule can be completed using the following Excel template: Amortization Schedule x Using the figures from the amortization schedule created in Excel, complete the amortization schedule below for 2022 Enter answers using two decimal places. Date Period 1/1/22 0 6/30/22 1 $ 12/31/22 2 Beginning balance 27,000 * $ 0 x Payment 27,000 ✓ $ 27,000 ✓ Interest Premium amortization 0 x $ 0 x 0 x 0 x $ Premium balance 24,000 * $ 0x 0 x Book value 0x 0 x 0 x
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