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1. Your company is considering a 10-year bond issue in order to fund a future plant expansion of their manufacturing site. Assume that your company has a 12/31 fiscal year-end, the bond will be issued on 1/1/22, and interest will be paid twice a year (on 6/30 and 12/31). Use a face value of 2,000,000. The stated rate of 9% and effective rate of interest of 9.25%

Make a spreadsheet using professional template design that will show senior management the cash flow, balance sheet, and income statement implications of each borrowing (i.e. an amortization table). You should use one Excel file but a separate

worksheet for each borrowing.

You should use the PV and PMT functions in Excel where necessary for time value computations. You should NOT use the factors from the Present Value tables in your textbook or elsewhere.

Your amortization table should include the payment date (use EOMONTH function), cash payments, interest expense, amortization/principal reduction, and the carrying value of the liability at the end of each period. The amortization table should use the effective interest method to compute interest expense. The bond amortization schedule should be prepared to accommodate a Premium or Discount with all numbers on the schedule appearing as positive values (Hint - use IF function).

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