worksheet-bond
Harith Al Azzawi
Lab3worksheet-Bonds-summer2012.xlsINSTRUCTIONS
| Instructions |
| 1) Prepare a bond amortization table for the premium and discount bonds |
| 2) Show formula sheet for both problems by copying your solution spreadsheet into the FORMULA sheets - use CTRL~ to display formulas |
| 3) Drop it in the drop box - submit both problem solutions in one Excel spreadsheet |
| 4) Include journal entries for each period for both bond types - you may include them underneath your bond amortization tables if you wish |
PURPOSE - BONDS LAB 3
DISCOUNT Problem 1
| Bond Discount |
| Par (face) value |
| Market rate per period |
| Coupon Rate per period |
| Number of periods |
| Coupon payment per period |
| Present Value at sale date |
| Total Interest Expense |
| Amortization Table |
FORMULA SHEET PROBLEM 1
PREMIUM Problem 2
| Bond Premium |
| On March 1, 2011, Lax Inc issued a $4,000,000, 5%, four-year bond. Interest is paid semi-annually beginning August 31, 2011. Market rate 4.5% |
| Par (face) value |
| Market rate per period |
| Coupon Rate per period |
| Number of periods |
| Coupon payment per year |
| Present Value at sale date |
| Total Interest Expense |
| Amortization Table |
FORMULA SHEET PROBLEM 2
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -
annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -
annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -
annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -
annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -
annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -annually.
A company sold a $200,000, 6%, 10 -year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi -annually.
Welcome to Lab 3 on Bonds. The purpose of this lab is to have you use Excel to perform the following
functions:
a) Calculate the present value of a bond
b) Calculate total interest expense over the term of the bond
c) Prepare an amortization table in Excel to show the amount of premium and discount amortized
in each period, calculate the amortized cost (carrying value) of the bond at the end of each
period, and to prepare journal entries to record interest expense and amortized bond discount
or premium
Once completed, you may submit your lab into the lab 3 drop box in your e -learn course
A company sold a $200,000, 6%, 10-year bond on January 1, 2010, when the market rate (yield rate) was 8%. Interest is paid semi-annually.
Welcome to Lab 3 on Bonds. The purpose of this lab is to have you use Excel to perform the following functions:
a) Calculate the present value of a bond
b) Calculate total interest expense over the term of the bond
c) Prepare an amortization table in Excel to show the amount of premium and discount amortized in each period, calculate the amortized cost (carrying value) of the bond at the end of each period, and to prepare journal entries to record interest expense and amortized bond discount or premium
Once completed, you may submit your lab into the lab 3 drop box in your e-learn course
