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Hambelton Ltd. issued $5,000,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Price of Bond 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "O" wherever required.)

Hambelton Ltd. issued $5,000,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Price of Bond 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "O" wherever required.)

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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Hambelton Ltd. issued $5,000,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Price of Bond 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "O" wherever required.) Interest Interest Premium Unamortized Net Bond Date Payment Expense Amortization Premium Liability Opening 1 2 3 4 5 6 7
Transcribed Image Text:Hambelton Ltd. issued $5,000,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Price of Bond 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "O" wherever required.) Interest Interest Premium Unamortized Net Bond Date Payment Expense Amortization Premium Liability Opening 1 2 3 4 5 6 7
TABLE I-1: Present value of 1: (P/F, i, n) 1 P/F : (1 + i)" 2% 2.5% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 14% 15% 1 0.98039 0.97561 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.87719 0.86957 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.76947 0.75614 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 0.67497 0.65752 4 0.92385 0.90595 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.59208 0.57175 0.90573 0.88385 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.51937 0.49718 6. 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.45559 0.43233 7 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.39964 0.37594 8 0.85349 0.82075 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.35056 0.32690 9. 0.83676 0.80073 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.30751 0.28426 10 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.26974 0.247 18 11 0.80426 0.76214 0.72242 0.64958 0.584 68 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.23662 0.21494 12 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.20756 0.18691 13 0.77303 0.72542 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.18207 0.16253 14 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.15971 0.14133 15 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.14010 0.12289 16 0.72845 0.67362 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.12289 0.10686 17 0.71416 0.65720 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 0.10780 0.09293 18 0.70016 0.64117 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.09456 0.08081 19 0.68643 0.62553 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.08295 0.07027 20 0.67297 0.61027 0.55368 0.45639 0.37689 0.31 180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.07276 0.06110 21 0.65978 0.59539 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 0.16370 0.13513 0.11174 0.09256 0.06383 0.05313 22 0.64684 0.58086 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 0.15018 0.12285 0.10067 0.08264 0.05599 0.04620 23 0.63416 0.56670 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 0.13778 0.11168 0.09069 0.07379 0.04911 0.04017 24 0.62172 0.55288 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 0.12640 0.10153 0.08170 0.06588 0.04308 0.03493 25 0.60953 0.53939 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.03779 0.03038 26 0.59758 0.52623 0.46369 0.36069 0.281 24 0.21981 0.17220 0.13520 0.10639 0.08391 0.06631 0.05252 0.03315 0.02642 27 0.58586 0.51340 0.45019 0.34682 0.26785 0.20737 0.16093 0.12519 0.09761 0.07628 0.05974 0.04689 0.02908 0.02297 28 0.57437 0.50088 0.43708 0.33348 0. 25509 0.19563 0.15040 0.11591 0.08955 0.06934 0.05382 0.04187 0.02551 0.01997 29 0.56311 0.48866 0.42435 0.32065 0.24295 0. 18456 0.14056 0.10733 0.08215 0.06304 0.04849 0.03738 0.02237 0.01737 30 0.55207 0.47674 0.41199 0.30832 0.23138 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.01963 0.01510 31 0.54125 0.46511 0.39999 0.29646 0.22036 0.16425 0.12277 0.09202 0.06915 0.05210 0.03935 0.02980 0.01722 0.01313 32 0.53063 0.45377 0.38834 0.28506 0.20987 0.15496 0.11474 0.08520 0.06344 0.04736 0.03545 0.02661 0.01510 0.01142 0. 14619 0. 13791 0. 13011 33 0.52023 0.44270 0.37703 0.27409 0.19987 0.10723 0.07889 0.05820 0.04306 0.03194 0.02376 0.01325 0.00993 34 0.51003 0.43191 0.36604 0.26355 0.19035 0.10022 0.07305 0.05339 0.03914 0.02878 0.02121 0.01162 0.00864 35 0.50003 0.42137 0.35538 0.25342 0. 181 29 0.09366 0.06763 0.04899 0.03558 0.02592 0.01894 0.01019 0.00751 36 0.49022 0.41109 0.34503 0.24367 0.17266 0.12274 0.08754 0.06262 0.04494 0.03235 0.02335 0.01691 0.00894 0.00653 37 0.48061 0.40107 0.33498 0.23430 0.16444 0.11579 0.08 181 0.05799 0.04123 0.02941 0.02104 0.01510 0.00784 0.00568 38 0.47119 0.39128 0.32523 0.22529 0. 15661 0.10924 0.07646 0.05369 0.03783 0.02673 0.01896 0.01348 0.00688 0.00494 0. 14915 0. 14205 39 0.46195 0.38174 0.31575 0.21662 0.10306 0.07146 0.04971 0.03470 0.02430 0.01708 0.01204 0.00604 0.00429 40 0.45289 0.37243 0.30656 0.20829 0.09722 0.06678 0.04603 0.03184 0.02209 0.01538 0.01075 0.00529 0.00373 45 0.41020 0.32917 0.26444 0.17120 0.11130 0.07265 0.04761 0.03133 0.02069 0.01372 0.00913 0.00610 0.00275 0.00186 50 0.37153 0.29094 0.22811 0.14071 0.08720 0.05429 0.03395 0.02132 0.01345 0.00852 0.00542 0.00346 0.00143 0.00092
Transcribed Image Text:TABLE I-1: Present value of 1: (P/F, i, n) 1 P/F : (1 + i)" 2% 2.5% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 14% 15% 1 0.98039 0.97561 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.87719 0.86957 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.76947 0.75614 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 0.67497 0.65752 4 0.92385 0.90595 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.59208 0.57175 0.90573 0.88385 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.51937 0.49718 6. 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.45559 0.43233 7 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.39964 0.37594 8 0.85349 0.82075 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.35056 0.32690 9. 0.83676 0.80073 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.30751 0.28426 10 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.26974 0.247 18 11 0.80426 0.76214 0.72242 0.64958 0.584 68 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.23662 0.21494 12 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.20756 0.18691 13 0.77303 0.72542 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.18207 0.16253 14 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.15971 0.14133 15 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.14010 0.12289 16 0.72845 0.67362 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.12289 0.10686 17 0.71416 0.65720 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 0.10780 0.09293 18 0.70016 0.64117 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.09456 0.08081 19 0.68643 0.62553 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.08295 0.07027 20 0.67297 0.61027 0.55368 0.45639 0.37689 0.31 180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.07276 0.06110 21 0.65978 0.59539 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 0.16370 0.13513 0.11174 0.09256 0.06383 0.05313 22 0.64684 0.58086 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 0.15018 0.12285 0.10067 0.08264 0.05599 0.04620 23 0.63416 0.56670 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 0.13778 0.11168 0.09069 0.07379 0.04911 0.04017 24 0.62172 0.55288 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 0.12640 0.10153 0.08170 0.06588 0.04308 0.03493 25 0.60953 0.53939 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.03779 0.03038 26 0.59758 0.52623 0.46369 0.36069 0.281 24 0.21981 0.17220 0.13520 0.10639 0.08391 0.06631 0.05252 0.03315 0.02642 27 0.58586 0.51340 0.45019 0.34682 0.26785 0.20737 0.16093 0.12519 0.09761 0.07628 0.05974 0.04689 0.02908 0.02297 28 0.57437 0.50088 0.43708 0.33348 0. 25509 0.19563 0.15040 0.11591 0.08955 0.06934 0.05382 0.04187 0.02551 0.01997 29 0.56311 0.48866 0.42435 0.32065 0.24295 0. 18456 0.14056 0.10733 0.08215 0.06304 0.04849 0.03738 0.02237 0.01737 30 0.55207 0.47674 0.41199 0.30832 0.23138 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.01963 0.01510 31 0.54125 0.46511 0.39999 0.29646 0.22036 0.16425 0.12277 0.09202 0.06915 0.05210 0.03935 0.02980 0.01722 0.01313 32 0.53063 0.45377 0.38834 0.28506 0.20987 0.15496 0.11474 0.08520 0.06344 0.04736 0.03545 0.02661 0.01510 0.01142 0. 14619 0. 13791 0. 13011 33 0.52023 0.44270 0.37703 0.27409 0.19987 0.10723 0.07889 0.05820 0.04306 0.03194 0.02376 0.01325 0.00993 34 0.51003 0.43191 0.36604 0.26355 0.19035 0.10022 0.07305 0.05339 0.03914 0.02878 0.02121 0.01162 0.00864 35 0.50003 0.42137 0.35538 0.25342 0. 181 29 0.09366 0.06763 0.04899 0.03558 0.02592 0.01894 0.01019 0.00751 36 0.49022 0.41109 0.34503 0.24367 0.17266 0.12274 0.08754 0.06262 0.04494 0.03235 0.02335 0.01691 0.00894 0.00653 37 0.48061 0.40107 0.33498 0.23430 0.16444 0.11579 0.08 181 0.05799 0.04123 0.02941 0.02104 0.01510 0.00784 0.00568 38 0.47119 0.39128 0.32523 0.22529 0. 15661 0.10924 0.07646 0.05369 0.03783 0.02673 0.01896 0.01348 0.00688 0.00494 0. 14915 0. 14205 39 0.46195 0.38174 0.31575 0.21662 0.10306 0.07146 0.04971 0.03470 0.02430 0.01708 0.01204 0.00604 0.00429 40 0.45289 0.37243 0.30656 0.20829 0.09722 0.06678 0.04603 0.03184 0.02209 0.01538 0.01075 0.00529 0.00373 45 0.41020 0.32917 0.26444 0.17120 0.11130 0.07265 0.04761 0.03133 0.02069 0.01372 0.00913 0.00610 0.00275 0.00186 50 0.37153 0.29094 0.22811 0.14071 0.08720 0.05429 0.03395 0.02132 0.01345 0.00852 0.00542 0.00346 0.00143 0.00092
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