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    Amortization Schedule for bond interest and amortization

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    Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2007, and mature January 1, 2012. Interest payable annually on January 1.

    Instructions:

    Set up a schedule of interest expense and discount amoritzation under the effective interest method (Hint: the effective interest rate must be computed). Remit in excel

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    https://brainmass.com/business/interest-rates/amortization-schedule-for-bond-interest-and-amortization-198768

    Solution Preview

    Please see the attached file

    We first calculate the effective rate using the RATE function in excel
    Issue Price 1,855,816
    Maturity 5 years
    Annual Interest 200,000
    Par Value 2,000,000
    Effective interest rate 12%
    The effective ...

    Solution Summary

    The solution explains how to prepare an amortization Schedule for bond interest and discount amortization.

    $2.19

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