(Learning Objective 2: Issue bonds payable (premium); record interest paymentand the related bond amortization using the effective-interest method) On June 30, 2018,the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bondspayable. The bonds pay interest on June 30 and December 31. The company amortizes bondpremium using the effective-interest method.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare a bond amortization table for the term of the bonds using Excel.3. Record the issuance of bonds payable on June 30, 2018; the payment of interest onDecember 31, 2018; and the payment of interest on June 30, 2019.
(Learning Objective 2: Issue bonds payable (premium); record interest payment
and the related bond amortization using the effective-interest method) On June 30, 2018,
the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bonds
payable. The bonds pay interest on June 30 and December 31. The company amortizes bond
premium using the effective-interest method.
Requirements
1. Use the PV function in Excel to calculate the issue price of the bonds.
2. Prepare a bond amortization table for the term of the bonds using Excel.
3. Record the issuance of bonds payable on June 30, 2018; the payment of interest on
December 31, 2018; and the payment of interest on June 30, 2019.
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