Shuttle Company issued $1,000,000, three-year, 10 percent bonds on January 1, year 1. The bond interest is paid each December 31 he end of the company's fiscal year. The bond was sold to yield 9 percent. Use Table 9C.1, Table 9C.2. (Round time value factor to decimal places.) Required: . Complete a bond payment schedule. Use the effective-interest amortization method. (Make sure that the unamortized discount/premium equals to 'O' and the Net Liability equals to face value of the bond in the last period. Interest expense in the period should be calculated as Cash Interest (+) discount / (-) premium amortized. Round intermediate and final answers to the hearest whole dollar.) Date 1/1/year 1 12/31/year 1 12/31/year 2 12/31/year 3 Interest expense Bonds payable Interest payment Bond Payment Schedule Interest Expense Cash Payment $ 100,000 100,000 100,000 Amortization of Premium 2. What amounts will be reported on the financial statements (statement of financial position, statement of earnings, and statement cash flows) for year 1, year 2, and year 3? (Round intermediate and final answers to the nearest whole dollar.) Year 1 Carrying Amount Year 2 Year 3
Shuttle Company issued $1,000,000, three-year, 10 percent bonds on January 1, year 1. The bond interest is paid each December 31 he end of the company's fiscal year. The bond was sold to yield 9 percent. Use Table 9C.1, Table 9C.2. (Round time value factor to decimal places.) Required: . Complete a bond payment schedule. Use the effective-interest amortization method. (Make sure that the unamortized discount/premium equals to 'O' and the Net Liability equals to face value of the bond in the last period. Interest expense in the period should be calculated as Cash Interest (+) discount / (-) premium amortized. Round intermediate and final answers to the hearest whole dollar.) Date 1/1/year 1 12/31/year 1 12/31/year 2 12/31/year 3 Interest expense Bonds payable Interest payment Bond Payment Schedule Interest Expense Cash Payment $ 100,000 100,000 100,000 Amortization of Premium 2. What amounts will be reported on the financial statements (statement of financial position, statement of earnings, and statement cash flows) for year 1, year 2, and year 3? (Round intermediate and final answers to the nearest whole dollar.) Year 1 Carrying Amount Year 2 Year 3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Shuttle Company issued $1,000,000, three-year, 10 percent bonds on January 1, year 1. The bond interest is paid each December 31,
the end of the company's fiscal year. The bond was sold to yield 9 percent. Use Table 9C.1, Table 9C.2. (Round time value factor to 4
decimal places.)
Required:
1. Complete a bond payment schedule. Use the effective-interest amortization method. (Make sure that the unamortized
discount/premium equals to '0' and the Net Liability equals to face value of the bond in the last period. Interest expense in the last
period should be calculated as Cash Interest (+) discount / (−) premium amortized. Round intermediate and final answers to the
nearest whole dollar.)
Date
1/1/year 1
12/31/year 1
12/31/year 2
12/31/year 3
Interest expense
Bonds payable
Interest payment
Issuance of bonds
Payment of bonds
Bond Payment Schedule
Interest
Expense
Cash Payment
$
100,000
100,000
100,000
Amortization
of Premium
2. What amounts will be reported on the financial statements (statement of financial position, statement of earnings, and statement of
cash flows) for year 1, year 2, and year 3? (Round intermediate and final answers to the nearest whole dollar.)
Year 1
Carrying
Amount
Year 2
Year 3

Transcribed Image Text:TABLE 9C.1
Present Value of $1, p = 1/(1+i)n
Periods 1.5% 1.75% 2% 2.25% 2.5% 2.75% 3% 3.25% 3.5%
1
0.9662
0.9732 0.9709 0.9685
0.9472
0.9472 0.9426 0.9380
2
0.9335
0.9852 0.9828 0.9804 0.9780 0.9756
0.9707 0.9659 0.9612 0.9565 0.9518
3 0.9563 0.9493 0.9423 0.9354 0.9286
0.9422 0.9330 0.9238 0.9148
0.9218 0.9151
0.9151 0.9085
0.9019
4
0.9060
0.8972 0.8885 0.8799
0.8714
5
0.9283 0.9169
0.9057 0.8947
0.8839
0.8839
6
0.9145 0.9011 0.8880
0.8880
0.8750
0.8750
0.8623 0.8498
0.8623
0.8498 0.8375 0.8254 0.8135
7
0.9010 0.8856
0.8706
0.8558
0.8413 0.8270 0.8131
0.8131 0.7994
0.7994 0.7860
8
0.8877 0.8704 0.8535
0.8369 0.8207
0.8049
0.7894 0.7742 0.7594
9
0.8746 0.8554
0.8368
0.8185
0.7834
0.8007 0.7834
0.8007
0.7664 0.7499
0.7664 0.7499
0.7337
10
0.8617 0.8407
0.8203
0.8005
0.7812
0.7624 0.7441 0.7263 0.7089
11
12
13
14
15
0.8732
0.8732 0.8626
1
2
3
4
5
6
7
0.8522
0.8626 0.8522 0.8420
0.8489 0.8263
0.8043 0.7829 0.7621
0.8043 0.7829 0.7621
0.7420
0.7420 0.7224 0.7034 0.6849
0.8364 0.8121
0.7885
0.7657
0.7436
0.7221 0.7014 0.6813 0.6618
0.6810 0.6598 0.6394
0.7488 0.7254
0.6611
0.6611 0.6391
0.6178
0.8240 0.7981 0.7730
0.7028
0.8118 0.7844 0.7579 0.7323 0.7077 0.6840
0.7999 0.7709 0.7430
0.6905 0.6657
0.7880 0.7576 0.7284 0.7005
0.7162
0.6419 0.6189 0.5969
16
0.6736
0.6479
0.6232 0.5995 0.5767
17
0.6572
0.6305 0.6050 0.5806 0.5572
0.7764 0.7446 0.7142 0.6851
0.6700 0.6412
18
0.6137
0.5874 0.5623 0.5384
19
0.7649 0.7318 0.7002
0.7536 0.7192 0.6864 0.6552
0.7425 0.7068 0.6730 0.6408
0.6255
0.5972 0.5703
0.5703 0.5446
0.5202
20
30
40
0.6103 0.5813 0.5537 0.5275 0.5026
0.6398 0.5942 0.5521 0.5130 0.4767 0.4431
0.5130 0.4767 0.4431 0.4120 0.3831 0.3563
0.5513 0.4996 0.4529 0.4106 0.3724 0.3379 0.3066 0.2782 0.2526
50 0.4750 0.4200 0.3715 0.3287 0.2909 0.2576 0.2281 0.2021 0.1791
Periods 3.75% 4% 4.5% 5%
6%
7%
8% 9% 10%
0.9639 0.9615 0.9569 0.9524 0.9434 0.9346
0.9524 0.9434 0.9346 0.9259 0.9174 0.9091
0.9290 0.9246 0.9157 0.9070 0.8900
0.8954 0.8890 0.8763 0.8638 0.8396
0.8386 0.8227 0.7921
0.8025 0.7835 0.7473
0.8734 0.8573 0.8417 0.8264
0.8163 0.7938 0.7722 0.7513
0.7629
0.8631 0.8548
0.7350 0.7084 0.6830
0.8319 0.8219
0.7130
0.6806 0.6499 0.6209
0.7462 0.7050 0.6663 0.6302 0.5963 0.5645
0.8018 0.7903
0.7679
0.7728 0.7599 0.7348
0.7107
0.6651
0.6227
0.5835 0.5470 0.5132
8
0.6768
0.6274
0.5820
0.5403
0.5403 0.5019
0.5019
0.4665
0.7449 0.7307 0.7032
0.7180 0.7026 0.6729 0.6446
9
0.5919 0.5439
0.5002 0.4604 0.4241
10
0.5083 0.4632 0.4224 0.3855
11
0.4751 0.4289 0.3875 0.3505
12
0.3971 0.3555 0.3186
13
0.6197 0.6006 0.5643 0.5303
14
0.5973 0.5775 0.5400 0.5051
15
0.6920 0.6756 0.6439 0.6139 0.5584
0.6670 0.6496 0.6162 0.5847 0.5268
0.6429 0.6246 0.5897 0.5568 0.4970 0.4440
0.4688 0.4150 0.3677
0.3677 0.3262 0.2897
0.4423 0.3878
0.4423 0.3878 0.3405 0.2992 0.2633
0.5757 0.5553 0.5167 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394
0.5549 0.5339 0.4945 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176
0.5348 0.5134 0.4732 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978
0.5155 0.4936 0.4528 0.4155 0.3503 0.2959
0.4969 0.4746 0.4333 0.3957 0.3305
0.4789 0.4564 0.4146 0.3769 0.3118 0.2584
0.3118
0.3314 0.3083 0.2670 0.2314
16
17
18
0.2959 0.2502 0.2120 0.1799
19
0.2765 0.2317 0.1945 0.1635
0.2765
20
0.2584 0.2145 0.1784 0.1486
0.1741
0.1314 0.0994 0.0754 0.0573
30
40 0.2293 0.2083 0.1719 0.1420
0.0972 0.0668
0.0972 0.0668
0.0460 0.0318 0.0221
50
0.1587 0.1407 0.1107 0.0872
0.0213 0.0134 0.0085
0.0543 0.0339
0.0543 0.0339
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