Bond computations: Straight-line amortization Southlake Corporation issued $900,000 of 8% bonds on March 1, 19X1. The bonds pay interest on March1 and September 1 and mature in 10 years. Assume the independent cases that follow. Case A
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The bonds are issued at 100. Case B
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The bonds are issued at 96. Case C
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The bonds are issued at 105.Southlake uses the straight-line method of amortization. Instructions: Complete the following table: Case A Case B Case C
a. Cash inflow on the issuance date
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b. Total cash outflow through maturity _______ _______ _______
c. Total borrowing cost over the life of the bond issue _______ _______ _______
d. Interest expense for the year ended December 31, 19X1 _______ _______ _______
e. Amortization for the year ended December 31, 19X1 _______ _______ _______
f. Unamortized premium as of December 31, 19X1 _______ _______ _______
g. Unamortized discount as of December 31, 19X1 _______ _______ _______
h. Bond carrying value as of December 31, 19X1 _______ _______ _______
5. Monthly operating costs of pollution control equipment used in a steel mill
6. Weekly wages of a seamstress employed by a jeans maker
7. Cost of compact discs (CDs) for newly recorded releases of Rush, Billy Joel, and Bryan Adamsa. Determine which of these costs are product costs and which are period costs. b. For the product costs only, determine those that are easily traced to the finished product and those that are not