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Bond Amortization

On January 1, 2015, Mac Inc. issued 3,000,000 bonds with an 8% coupon rate maturing in 4 years and paying interest annually, when the market rate was 11%. The document asks for the issue price and 4 year amortization schedule. On January 1, 2014 Sonic Co. issued 4,000,000 bonds with a 12% coupon rate maturing in 5 years and paying interest semi-annually, when the market rate was 10%. The document asks for the issue price and 5 year amortization schedule.

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2K views1 page

Bond Amortization

On January 1, 2015, Mac Inc. issued 3,000,000 bonds with an 8% coupon rate maturing in 4 years and paying interest annually, when the market rate was 11%. The document asks for the issue price and 4 year amortization schedule. On January 1, 2014 Sonic Co. issued 4,000,000 bonds with a 12% coupon rate maturing in 5 years and paying interest semi-annually, when the market rate was 10%. The document asks for the issue price and 5 year amortization schedule.

Uploaded by

Shiny Natividad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Bond Amortization - Activity

1. On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8%
maturing in 4 years. The interest is paid annually, and the market interest rate at the
date of issue was 11%. What is the issue price of the bond? Prepare the 4 year
amortization schedule for the bond.
2. On January 1, 2014, Sonic Co. issued 4,000,000 12% bonds maturing in 5 years. The
bonds pay interest semi-annually. The market rate of interest as of the date of issuance
is 10%. What is the issue price of the bond? Prepare the 5 year amortization schedule
for the bond.

Bond Amortization - Activity


1. On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8%
maturing in 4 years. The interest is paid annually, and the market interest rate at the
date of issue was 11%. What is the issue price of the bond? Prepare the 4 year
amortization schedule for the bond.
2. On January 1, 2014, Sonic Co. issued 4,000,000 12% bonds maturing in 5 years. The
bonds pay interest semi-annually. The market rate of interest as of the date of issuance
is 10%. What is the issue price of the bond? Prepare the 5 year amortization schedule
for the bond.

Bond Amortization - Activity


1. On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8%
maturing in 4 years. The interest is paid annually, and the market interest rate at the
date of issue was 11%. What is the issue price of the bond? Prepare the 4 year
amortization schedule for the bond.
2. On January 1, 2014, Sonic Co. issued 4,000,000 12% bonds maturing in 5 years. The
bonds pay interest semi-annually. The market rate of interest as of the date of issuance
is 10%. What is the issue price of the bond? Prepare the 5 year amortization schedule
for the bond.

Bond Amortization - Activity


1. On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8%
maturing in 4 years. The interest is paid annually, and the market interest rate at the
date of issue was 11%. What is the issue price of the bond? Prepare the 4 year
amortization schedule for the bond.
2. On January 1, 2014, Sonic Co. issued 4,000,000 12% bonds maturing in 5 years. The
bonds pay interest semi-annually. The market rate of interest as of the date of issuance
is 10%. What is the issue price of the bond? Prepare the 5 year amortization schedule
for the bond.

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