Coney Island Entertainment issues $1,300,000 of 6% bonds, due in 15 years, with
ID: 2478251 • Letter: C
Question
Coney Island Entertainment issues $1,300,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year.
Coney Island Entertainment issues $1,300,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year.
The market interest rate is 7% and the bonds issue at a discount. (FV of $1. PV of $1. FVA of $1. and PVA of $1)(Use appropriate factor(s) from the table provided. Do not round interest rate factors.)Explanation / Answer
no ofperiod 30 PMT 39000 rate 3.5% FV 1300000 PV $1,180,451.70 date interest payment interest expense(3.5%) amortisation of premium balance in discount face value book value 1-Jan $119,548.30 1300000 $1,180,451.70 30-Jun 39000 $41,315.81 $2,315.81 $117,232.49 1300000 $1,182,767.51 31-Dec 39000 $41,396.86 $2,396.86 $114,835.62 1300000 $203,466.00