Answer Happy

BOND PREMIUM AMORTIZATION SCHEDULE alb Interpret the following table by answering the following questions: 1) When the bonds mature at the end of Year 2, what amount of principal will the bond issuer pay investors? 2) How much cash was received on the day the bonds were issued (sold)? 3) Were the bonds issued at a premium or a discount? If so, what was the amount of the premium or discount? 4) How much cash will be disbursed for interest each period and in total over the life of the bonds? 5) What is the coupon rate? What was the annual market rate of interest on the date the bonds were issued? 6) What amount of interest expense will be reported on the income statement for Year 1 and Year 27 7) What amount will be reported on the balance sheet at the end of Year 1 and Year 2? (b) Amortization Balance Date Cash Interest $103,630 $4,145 102.775 4,111 101,886 01/01/2016 06/30/2016 12/31/2016 06/30/2017 12/31/2017 5,000 5,000 $(855) (889) (925) (961) 4,075 100,961 4,099 5,000 100,000