9:51 LTL Slides.pdf Q Paying off marketable debt carly- Example Company A issed S 3,000,000 of bends paying 4%on January 1, 20X6 Transaction costs of 5 50,000 ware incumod on this date The bonds matures in 5 years Interest is paid semi anually (June 30 and December 31) The market rate of interest was 5% at the time of isance Market rate at end of 20X6 is 6% Paying off marketable debt carly- Example On December 31, 20x8 Company Arepurchased the bonds in the market place when the market interost rate was 3.5% For both the amortized cost method and the FVN method: Pepare the journal entries for 20006 and for the parchase on Decenber 31 20x7 66 CP Paying off marketable debt early Example Company A issued $ 3,000,000 of bonds paying 4 % on January 1, 20X6 Transaction costs of $ 50,000 were incurred on this date The bonds matures in 5 years. Interest is paid semi annually (June 30 and December 31) The market rate of interest was 5% at the time of issuance Market rate at end of 20X6 is 6% MGT 224 fal 2019 Copyge TPCI 2019 Paying off marketable debt early - Example On December 31, 20X8 Company A repurchased the bonds in the market place when the market interest rate was 3.5% For both the amortized cost method and the FV-NI method: Prepare the journal entries for 20X6 and for the repurchase on December 31 20X7 9:51 LTL Slides.pdf Q Paying off marketable debt carly- Example Company A issed S 3,000,000 of bends paying 4%on January 1, 20X6 Transaction costs of 5 50,000 ware incumod on this date The bonds matures in 5 years Interest is paid semi anually (June 30 and December 31) The market rate of interest was 5% at the time of isance Market rate at end of 20X6 is 6% Paying off marketable debt carly- Example On December 31, 20x8 Company Arepurchased the bonds in the market place when the market interost rate was 3.5% For both the amortized cost method and the FVN method: Pepare the journal entries for 20006 and for the parchase on Decenber 31 20x7 66 CP Paying off marketable debt early Example Company A issued $ 3,000,000 of bonds paying 4 % on January 1, 20X6 Transaction costs of $ 50,000 were incurred on this date The bonds matures in 5 years. Interest is paid semi annually (June 30 and December 31) The market rate of interest was 5% at the time of issuance Market rate at end of 20X6 is 6% MGT 224 fal 2019 Copyge TPCI 2019 Paying off marketable debt early - Example On December 31, 20X8 Company A repurchased the bonds in the market place when the market interest rate was 3.5% For both the amortized cost method and the FV-NI method: Prepare the journal entries for 20X6 and for the repurchase on December 31 20X7