Long-Term Financing: Bonds

Solution to demonstration problem

a.

Price received:
	Present value of principal: $100,000 x 0.04603 (see Appendix, Table A.3, 40 period row, 8% column)	$ 4,603
	Present value of interest: $7,500 x 11.92461 (see Appendix, Table A.4, 40 period row, 8% column)	89,435
Total		$94,038

b.

(A)	(B)	(C)	(D)	(E)
Interest Payment Date	Bond Interest Expense Debit (E x 0.16 x ½)	Cash credit ($100,000 x 0.15 x ½)	Discount on Bonds Payable Credit (B-C)	Carrying value of Bonds Payable (previous balance in E+D)
Issued Price				$94,038
2010/10/31	$7,523	$7,500	$23	94,061
2011/4/30	7,525	7,500	25	94,086

c.

2010 Apr. 30	Cash	94,038
	Discount on bonds payable	5,962
	Bonds payable	100,000
	Issued $100,000 face value of 20-year, 15% bonds to yield 16%.

Oct. 31	Bond interest expense	7,523
	Discount on bonds payable	23
	Cash	7,500
	Paid semiannual bond interest expense

Dec. 31	Bond interest expense ($7,525 x (1/3))	2,508
	Discount on bonds payable	8
	Bond interest payable ($7,500 x (1/3))	2,500
	To record accrual of two months' interest expense
	To record accrual of two months' interest expense.

2011 Apr. 30	Bond interest payable	2,500
	Bond interest expense ($7,525 x (2/3))	5,017
	Discount on bonds payable	17
	Cash	7,500
	Paid semiannual bond interest expense.

Callback before_footer in local_aigrade component should be migrated to new hook callback for core\hook\output\before_footer_html_generation

line 7225 of /lib/moodlelib.php: call to debugging()
line 7292 of /lib/moodlelib.php: call to {closure}()
line 71 of /lib/classes/hook/output/before_footer_html_generation.php: call to get_plugins_with_function()
line 987 of /lib/classes/output/core_renderer.php: call to core\hook\output\before_footer_html_generation->process_legacy_callbacks()
line 97 of /mod/book/tool/print/index.php: call to core\output\core_renderer->footer()