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 |
$ 100 |
Dividend rate |
8 % |
Shares outstanding |
9,000 |
Dividends in arrears none