ACC 304 All Assignments ACC 304 All Assignments | Page 22

1) On January 1, 2015, Piper Co. issued ten-year bonds with a face
value of $3,000,000 and a stated interest rate of 10%, payable
semiannually on June 30 and December 31. The bonds were sold to
yield 12%. Table values are:
Present value of 1 for 10 periods at 10% .386
Present value of 1 for 10 periods at 12% .322
Present value of 1 for 20 periods at 5% .377
Present value of 1 for 20 periods at 6% .312
Present value of annuity for 10 periods at 10% 6.145
Present value of annuity for 10 periods at 12% 5.650
Present value of annuity for 20 periods at 5% 12.462
Present value of annuity for 20 periods at 6% 11.470
2) Without prejudice to your solution in part (a), assume that the
issue price was $2,652,000. Prepare the amortization table for 2015,
assuming that amortization is recorded on interest payment dates using
the effective-interest method.
3)
The following information pertains to Parsons Co.:
Preferred stock, cumulative:
Par value per share
Dividend rate
$100
8%