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Excel #4

ACCT 20100 Fall 2010

Bond Accounting

For each of the bonds described below:

1. Determine the Appropriate Present Value Factors using the formulas:

a. [pic]

b. [pic]

2. Calculate the Purchase Price of the Bond.

3. Prepare a Bond Amortization Schedule (using the effective interest method)

4. Prepare the journal entry necessary on the date of issuance January 1, 2010.

5. Prepare the journal entry to record the first interest payment.

6. Prepare the journal entry to record the retirement of the bond at December 31, 2013.

Bonds:

Bond #1

|Face Value |$100,000 |

|Stated Rate |6% |

|Market Rate |6% |

|Interest Paid |Annually |

|Number of years |4 years |

Bond #2

|Face Value |$100,000 |

|Stated Rate |6% (3% semi-annual rate) |

|Market Rate |6% (3% semi-annual rate) |

|Interest Paid |Semi-Annually |

|Number of years |4 years (8 periods) |

Bond #3

|Face Value |$100,000 |

|Stated Rate |8% |

|Market Rate |10% |

|Interest Paid |Annually |

|Number of years |4 years |

Bond #4

|Face Value |$100,000 |

|Stated Rate |8% (4% semi-annual rate) |

|Market Rate |10% (5% semi-annual rate) |

|Interest Paid |Semi-Annually |

|Number of years |4 years (8 periods) |

Bond #5

|Face Value |$100,000 |

|Stated Rate |11% |

|Market Rate |8% |

|Interest Paid |Annually |

|Number of years |4 years |

Bond #6

|Face Value |$100,000 |

|Stated Rate |11% (5.5% semi-annual rate) |

|Market Rate |8% (4% semi-annual rate) |

|Interest Paid |Semi-Annually |

|Number of years |4 years (8 periods) |

Excel Rules:

1. You must use the Excel Templates provided on the ACCT 20100 website (). Note that each template is individualized for each student.

2. You must work individually on this assignment. Working with another student is a violation of the Notre Dame Honor code and will be enforced when discovered.

3. You must use links and formulas where ever possible. Failure to exploit Excel will result in a zero grade. There are only a couple of instances where typing numbers may be necessary.

4. You must sign your name to the honor code statement (the first sheet of the Excel template). Failure to sign your name (by typing your name) will result in a zero grade.

5. You must name your Excel file as: last name first name Excel 3. Failure to name your file in this exact syntax will result in a zero grade.

6. You need to upload your assignment to Concourse. No other means will be acceptable.

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