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On April 1, 2018, Windel Corporation issued bonds with detachable warrants. Information related to these bonds is...

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Accounting

On April 1, 2018, Windel Corporation issued bonds withdetachable warrants.

Information related to these bonds is shown below:

Face value of bonds $325,000

Stated rate of interest 8%

Bonds issued at 106%

Each $1,000 bond was sold with 20 detachable warrants

Each warrant allowed the investor to purchase one share ofcommon stock for $16

The par value of the common stock is $4.00

On April 1, 2018 the market values were:

Common stock $12

Warrants $7

In February 2023, some of the warrants were exercised. Thepercentage of warrants exercised was 20%

Bond #2: On January 1, 2016, Windel sold the followingbonds:

Maturity value $850,000

Stated rate of interest 9%

Effective rate of interest 8%

Interest is paid each December 31

Maturity date January 1, 2021

On December 31, 2018, Windel redeemed (called) some of thebonds:

Call premium 105%

Percentage of bonds redeemed 40%

Required:

a. With respect to Bond #2:

1. Prepare an amortization schedule for the bonds.

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