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Southlake Corporation




Question;Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The;bonds pay interest on March 1 and September 1 and mature in 10 years.;Assume the independent cases that follow. ? Case A?The bonds are issued at 100. ? Case B?The bonds are issued at 96. ? Case C?The bonds are issued at 105. Southlake uses the straight-line method of amortization. Instructions: Complete the following table: Case A Case B Case Ca. Cash inflow on the issuance date b. Total cash outflow through maturity c. Total borrowing cost over the life of the bond issue d. Interest expense for the year ended December 31, 20X1e. Amortization for the year ended December 31, 20X1f. Unamortized premium as of December 31, 20X1g. Unamortized discount as of December 31, 20X1h. Bond carrying value as of December 31, 20X1


Paper#44522 | Written in 18-Jul-2015

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