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Question No. 8.

4:

Loan Amount $ 164,440


Interest 12%
Number of Years 6
Payment per year $ 39,996 approx. $ 40,000

Beginning
Year Payment Principal Interest
Balance

1 $ 164,440 $ 39,996 $ 20,263 $ 19,732.80


2 $ 144,177 $ 39,996 $ 22,695 $ 17,301.21
3 $ 121,482 $ 39,996 $ 25,418 $ 14,577.83
4 $ 96,064 $ 39,996 $ 28,468 $ 11,527.65
5 $ 67,595 $ 39,996 $ 31,885 $ 8,111.44
6 $ 35,711 $ 39,996 $ 35,711 $ 4,285.29
Ending
Balance

$ 144,177
$ 121,482
$ 96,064
$ 67,595
$ 35,711
$ -
Question No. 8.7:

Date Particular Dr.


1) Cash 14,700,000
Bonds Discount 300,000
Bonds Payable

Date Particular Dr.


2) Issuance Cost (Bonds) 250,000
Cash (W-1) 7,499,600
Bonds Payable
Premium on Bonds issue
(w-1) Sum of Cash Received $
P.V of Annual Interest Payment
5,269,600
($80 x 7,000 = $560,000 @ F/A (9.41)
Add: Principal Payment F/P ($7,000,000, 6.5%, 15) 2,730,000
Total Cash received 7,999,600
Less: Bonds Issuance Cost 250,000
Net Cash received 7,749,600

Date Particular Dr.


3) Cash (w-2) 4,660,254
Bonds discount 339,746
Bonds Payable
(w-2) Sum of Cash Received $
P.V of Semi-annual Interest Payment
2,378,307
($350,000/2 = $175,000 @ F/A (13.590)
2,281,947
Add: Principal Payment F/P ($5,000,000, 4%, 20)
Total Cash received 4,660,254
Cr.

15,000,000

Cr.

7,000,000
999,600

Cr.

5,000,000
Question No. 8.8:

Date Particluar Debit (Dr.)


01.01.2008 Cash $ 4,750,000.00
Bonds Discount $ 250,000.00
Bonds Payable

Date Particluar Debit (Dr.)


01.01.2013 Bonds Payable $ 5,000,000.00
Loss on redemption of Bonds $ 375,000.00
Cash
Discount of Bonds
Credit (Cr.)

$ 5,000,000.00

Credit (Cr.)

$ 5,250,000.00
$ 125,000.00

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