ACG 3113 (Intermediate II) – Comprehensive Bond Project
YOU MUST USE A FORMULA OR CELL REFERNCE WHERE POSSIBLE
PRINT out 2 copies of your spreadsheet: one with the answers to the problem and another
with all of your formulas. You must turn in both copies.
Use the reference sheet “Templates for Time Value of Money” to create in excel a well-labeled
amortization schedules and prepare the requested journal entries.
You can discuss this project with your classmates, but you must prepare your own spreadsheet.
Please compute the initial present value of the Bond payable in excel (via functions) and also by
hand using tables.
Caprio Inc. sells $500,000 of 10% bonds on June 1, 2015. The bonds pay interest on December 1
and June 1. The due date of the bonds is June 1, 2020. The bonds yield 8%. On October 1, 2016,
Caprio buys back $200,000 (face value) of bonds for $210,000 in cash (not including accrued
interest which was paid separately – also in cash). Provide the following:
a. The present value of the bond payable is $ ______________________ on June 1, 2015.
Round to the nearest dollar.
b. Prepare a well-labeled schedule (with debits/credits shown) for the journal entries
through the life of the Bond.
c. Give all journal entries for:
• 6/1/15
• 12/1/15
• 12/31/15
• 6/1/16
• 10/1/16 Update
• 10/1/16 accrued interest payment
• 10/1/16 redemption