Relationship issue cost and high quality amortization

Connection issue price and high quality amortization

In January one particular, 2011, Placentero Co. released ten-year provides with a confront value of P1, 000, 000 and a explained interest rate of 10%, payable semiannually on June 35 and 12 , 31. The bonds were sold to yield 12%. Desk values will be: В В В В В В В В В В В В В В В Present value of 1 for twelve periods in 10%......................................... В В В В В В В В. 386 В В В В В В В В В В В В В В В Present value of 1 pertaining to 10 intervals at 12%......................................... В В В В В В В В. 322 В В В В В В В В В В В В В В В Present value of just one for 20 periods at 5%.......................................... В В В В В В В В. 377 В В В В В В В В В В В В В В В Present value of 1 for twenty periods at 6%.......................................... В В В В В В В В. 312 В В В В В В В В В В В В В В В Present value of annuity intended for 10 periods at 10%............................... В В В В В В В В В В В В 6th. 145 В В В В В В В В В В В В В В В Present benefit of pension for 10 periods by 12%............................... В В В В В В В В В В В В 5. 600 В В В В В В В В В В В В В В В Present value of annuity for 20 durations at five per cent................................. В В В В В В В В В В doze. 462 В В В В В В В В В В В В В В В Present worth of pension for twenty periods in 6%................................. В В В В В В В В В В 11. 470

Instructions

(a)В В В Calculate the problem price in the bonds.

(b)В В В Without prejudice to your solution in part (a), assume that the problem price was P884, 1000. Prepare the amortization stand for 2011, assuming that retirement is recorded on interest payment dates.

Solution 14-122

(a)В. 312 Г— P1, 500, 000В В В В В В =В В В В В P312, 000 В В В В В В В 11. 470 Г— P50, 000В В В В В В В В В В =В В В В В В 573, 500 В В В В В В В В В В В В В В В В В В В В В В В В В В В В В P885, five-hundred

В  В В В В В В В В В В В В В В В

Funds В В В В В В В В В В В В Interest В В В В В В В В В В В В В В В В В В В В В В Discount (b)В В DateВ В В В В В В В В В В В В В В В В В В PaidВ В В В В В В В В В В В В В В В В В В В В В В ExpenseВ В В В В В В В В В В В В В В В В В В В В В В В AmortizedВ В В В В В В В В В Carrying Quantity В В В В В В В 1/1/11В В В В В В В В В В В В В В В В В В В В В В В В В В В В...