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Southlake corporation issued 900000 of 8 bonds on march 1

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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 C
  1.  Cash inflow on the issuance date

_______

_______

_______
  1. Total cash outflow through maturity

_______

_______

_______
  1. Total borrowing cost over the life of the bond issue

_______

_______

_______
  1. Interest expense for the year ended December 31, 20X1

_______

_______

_______
  1. Amortization for the year ended December 31, 20X1

_______

_______

_______
  1. Unamortized premium as of December 31, 20X1

_______

_______

_______
  1. Unamortized discount as of December 31, 20X1

_______

_______

_______
  1. Bond carrying value as of December 31, 20X1

_______

_______

_______

Reference no: EM13396871

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