On January 1, 2022, Lark Road Corporation issued $600,000 par value, 3%, 5-year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1, 2022. The market rate of interest on the date of the bond issue was 6%. The company's fiscal year ends on December 31. Future Value of $1 table Future Value of an Ordinary Annuity table Future Value of an Annuity Due table Present Value of $1 table Present Value of an Ordinary Annuity table Present Value of an Annuity Due table Read the requirements. Requirement a. Determine the issue price of the debt. (Use the present value and future value tables, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.) The issue price of the debt = $ 523,228 Requirement b. Prepare the amortization table for the bond issue through January 1, 2025, assuming that Lark Road uses the effective interest rate method of amortization. (Round each calculation to the nearest whole number and then use the rounded value for each subsequent calculation in the table.) Date January 1, 2022 July 1, 2022 January 1, 2023 July 1, 2023 January 1, 2024 July 1, 2024 January 1, 2025 Cash Interest *** Effective Interest Discount/Premium Amortization Carrying Value

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2022, Lark Road Corporation issued $600,000 par value, 3%, 5-year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the
period on July 1, 2022. The market rate of interest on the date of the bond issue was 6%. The company's fiscal year ends on December 31.
Future Value of $1 table Future Value of an Ordinary Annuity table Future Value of an Annuity Due table
Present Value of $1 table Present Value of an Ordinary Annuity table Present Value of an Annuity Due table
Read the requirements.
Requirement a. Determine the issue price of the debt. (Use the present value and future value tables, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or
the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.)
The issue price of the debt = $ 523,228
Requirement b. Prepare the amortization table for the bond issue through January 1, 2025, assuming that Lark Road uses the effective interest rate method of amortization. (Round each calculation to the
nearest whole number and then use the rounded value for each subsequent calculation in the table.)
Date
January 1, 2022
July 1, 2022
January 1, 2023
July 1, 2023
January 1, 2024
July 1, 2024
January 1, 2025
Cash
Interest
Effective
Interest
Discount/Premium
Amortization
Carrying
Value
Transcribed Image Text:On January 1, 2022, Lark Road Corporation issued $600,000 par value, 3%, 5-year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1, 2022. The market rate of interest on the date of the bond issue was 6%. The company's fiscal year ends on December 31. Future Value of $1 table Future Value of an Ordinary Annuity table Future Value of an Annuity Due table Present Value of $1 table Present Value of an Ordinary Annuity table Present Value of an Annuity Due table Read the requirements. Requirement a. Determine the issue price of the debt. (Use the present value and future value tables, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.) The issue price of the debt = $ 523,228 Requirement b. Prepare the amortization table for the bond issue through January 1, 2025, assuming that Lark Road uses the effective interest rate method of amortization. (Round each calculation to the nearest whole number and then use the rounded value for each subsequent calculation in the table.) Date January 1, 2022 July 1, 2022 January 1, 2023 July 1, 2023 January 1, 2024 July 1, 2024 January 1, 2025 Cash Interest Effective Interest Discount/Premium Amortization Carrying Value
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