Haiku Inc. issued $600,000 of 10-year bonds with a stated rate of 11% when the market rate was 12%. The bonds pay interest semi-annually. Assume that the bonds were issued for $565,710. Prepare an...


Please explain how to arrive at the "Market Price of Bonds (% of face) = 94.285%" section in the excel sheet.


Haiku Inc. issued $600,000 of 10-year bonds with a stated<br>rate of 11% when the market rate was 12%. The bonds pay<br>interest semi-annually. Assume that the bonds were issued<br>for $565,710. Prepare an amortization table for the first<br>three payments.<br>Semiannual<br>Semiannual<br>Semiannual .<br>Amortization<br>Interest<br>Interest<br>Interest Expense<br>Discount<br>Period<br>Payment<br>$33.943<br>$33,000<br>$943<br>BONDS PAYABLE - EFFECTIVE-INTEREST AMORTIZATION METHOD - DISCOUNT (HW-02, #1)<br>Semiannual<br>Bond Discount<br>Beginning<br>Interest Period Carrying Value Interest Expense<br>Semiannual<br>Semiannual<br>Unamortized<br>Ending Carry<br>Interest Cash<br>Amortized<br>Bond Discount<br>Value<br>Payment<br>34,290<br>565,710<br>1<br>565,710<br>33,943<br>33,000<br>943<br>33,347<br>566,653<br>2<br>566,653<br>33,999<br>33,000<br>999<br>32,348<br>567,652<br>3<br>567,652<br>34,059<br>33,000<br>1,059<br>31,289<br>568,711<br>Bond Face Value =<br>$600,000<br>%3D<br>Annual Interest Rate =<br>11.0%<br>Time Period - Semiannual (years) =<br>0.5<br>Market Price of Bonds (% of Face) =<br>94.285%<br>Current Market Interest Rate =<br>12.0%<br>

Extracted text: Haiku Inc. issued $600,000 of 10-year bonds with a stated rate of 11% when the market rate was 12%. The bonds pay interest semi-annually. Assume that the bonds were issued for $565,710. Prepare an amortization table for the first three payments. Semiannual Semiannual Semiannual . Amortization Interest Interest Interest Expense Discount Period Payment $33.943 $33,000 $943 BONDS PAYABLE - EFFECTIVE-INTEREST AMORTIZATION METHOD - DISCOUNT (HW-02, #1) Semiannual Bond Discount Beginning Interest Period Carrying Value Interest Expense Semiannual Semiannual Unamortized Ending Carry Interest Cash Amortized Bond Discount Value Payment 34,290 565,710 1 565,710 33,943 33,000 943 33,347 566,653 2 566,653 33,999 33,000 999 32,348 567,652 3 567,652 34,059 33,000 1,059 31,289 568,711 Bond Face Value = $600,000 %3D Annual Interest Rate = 11.0% Time Period - Semiannual (years) = 0.5 Market Price of Bonds (% of Face) = 94.285% Current Market Interest Rate = 12.0%

Jun 10, 2022
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