Jan-01 Inv in Bonds 1,049,740

Cash 1,049,740

Dec-31 Cash 120,000

Interest Income 120,000 FA*NR

SCHEDULE Amortization of BOND PREMIUM

INTEREST EARNED
CA*ER 1,049,740
120,000 104,974 15,026

Interst Income 15,026

Inv in Bonds 15,026

AMORTIZATION DISCOUNT
INCREASING INV in BONDS and INTEREST INCOME

AMORTIZATION PREMUIM

DECREASING INV in BONDS and INTEREST INCOME

NOMINAL RATE VS EFFECTIVE RATE

10% > 8% BOND PREMIUM

8% < 10% BOND DISCOUNT

Jan-01 Inv in Bonds 4,171,810

Cash 4,171,810

Dec-31 Cash 400,000 RECOGNIZE INCOME RECEIVED

Interest Income 400,000

SCHEDULE AMORTIZATION PREMIUM

INTEREST RECEIVED INTEREST EARNED
FA*NR CA*EF
Dec. 31, 2 400,000 333,745 66,255

Interest Income 66,255

Investment in Bonds 66,255

Cash 1,000,000
Investment in Bonds 1,000,000

Dec 31, 20 Cash 300,000

Interest Income 300,000
 AMORTIZATION
300,000 3105555
300,000 248,444 51,556

Interest Income 51,556

Inv in Bonds 51,556

Cash 1,000,000
Inv in Bonds 1,000,000

COMPUTATION OF PRESENT VALUE

FA 3,000,000
LIFE 3years 36
NR 6%
ER 7% 0.005833333
PV FACTOR
PV of PRINCIPAL 3,000,000 0.79 2370000
PV of INTEREST 180,000 2.58 464400
PRESENT VALUE = FAIR VALUE 2,834,400.00

Jan 1, 2021Inv in Bonds 2,834,400

Cash 2,834,400

Dec. 31 Cash 180,000

Interest Income 180,000

SCHEDULE
180,000 198,408.00 18,408.00

Inv in Bonds 46,752

Interest Income 46,752

Dec-31
Jan 1, 2021Inv in Bonds 1,049,740 Jan 01, 20
Cash 1,049,740

Dec. 31, 2 RECOGNITION OF INTEREST RECEIVED FA*NR Dec. 31, 2

Cash 120,000
Interest Income 120,000

AMORTIZATION OF BOND PREMIUM

SCHEDULE FA*NR CA*EF AMORTAZA 1,049,740
120,000 104974 15,026

Interst Income 15,026

Inv in Bonds 15,026 SCHEDULE

BOND PREMIUM DECERESES - INV in BONDS and INT INC

BOND DISCOUNT ICREASE - INV IN BONDS AND INT INC
Dec 31, 20
Dec 31, 20 RECOGNIZE INTEREST RECEIVED
Cash 120,000
Int Inc 120,000

AMORTZATION 1,034,714 103471.4 EFFECTIVE RATE VS NOMINAL RA

Int Inc 16529 16,529 10%
Inv in Bonds 16529 8%
EFFECRTIVE RATE VS NOMINAL RATE
8% < 10% BOND PREMIUM Jan-01
10% > 8% BOND DISCOUNT

Jan 1, 2021Inv in Bonds 4,171,810 Dec. 31, 2

Cash 4,171,810

Dec 31, 20 RECOGNITION OF INTEREST RECEIVED FA*NR

Cash 400,000
Interest Income 400,000 SCHEDULE OF AMORTIZATION

AMORTIZATION CA*EF
Interest Inc 66255
Inv in Bonds 66,255

PAYMENT OF MATURE PRINCIPAL

Cash 1,000,000
Inv in Bonds 1,000,000
Dec 31, 20
Dec. 31, 2 Cash 300,000
Interest Income 300,000 300,000
3,105,555 248444.4
AMORTIZATION 51,556
 Interest Income 51,556
Inv in Bonds 51,556

Cash 1,000,000
Inv in Bonds 1,000,000
GIVEN DATE
FA 3,000,000 NR 6% FA
LIFE 3years EF 8% LIFE

PV FACTOR
PV of PRINCIPAL 3,000,000 0.79 2370000 PV OF PRINCIPAL
PV of INTEREST 180,000 2.58 464400 PV OF INTEREST
2,834,400.00 PRICE OF BONDS

Inv. In Bonds 2,834,400

Cash 2,834,400
 Inv in Bonds 1,049,740
Cash 1,049,740

RECOGNITION OF INTEREST RECEIVED FA*NR

Cash 120,000
Interest Income 120,000

AMORTIZATION

Interest inc 15,026

Inv in bonds 15,026

FA*NR CA*ER AMORTIZATION

1,049,740
120,000 104974 15,026

RECOGNIZED INT REC

AMORTIZATION

EFFECTIVE RATE VS NOMINAL RATE

> 8% bond discount
< 10% bond premium

Inv in Bonds 4,171,810

Cash 4,171,810

RECOGNITION OF INT RECEIVED FA*NR 400,000 Interest Received

Cash 400,000 333,745 Interest Earned
Interest Income 400,000 66,255

AMORTIZATION CA*EF
SCHEDULE OF AMORTIZATION
Interest Income 66,255
Inv in Bonds 66,255

PRINCIPAL PAYMENT
Cash 1,000,000
Inv in Bonds 1,000,000

Cash 300,000 300,000 FA*NR 3,000,000

Interest Income 300,000 248444.4 CA*EF 3,105,555
51,556
Interest Income 51,556
Inv in Bons\ds 51,556
 Cash 1,000,000
Inv in Bonds 1,000,000

GIVEN DATE
3,000,000 NR 6%
3yrs EF 8% Cash 100,000
Accrued Int In 50,000
PV FACTOR Inter Income 50,000
PV OF PRINCIPAL 3,000,000 0.79 2370000
PV OF INTEREST 180,000 2.58 464400
PRICE OF BONDS 2,834,400.00