Académique Documents
Professionnel Documents
Culture Documents
2. January 1, 2009
Cash (price determined above) ...................................... 70,823,680
Discount on bonds (difference) .................................. 9,176,320
Bonds payable (face amount) .................................. 80,000,000
2. January 1, 2009
Cash (price determined above) ........................... 483,842
Discount on bonds payable (difference).......... 16,158
Bonds payable (face amount) ....................... 500,000
3. Amortization schedule
Comparing the amortized initial amount at December 31, 2009, with the fair value
on that date provides the Fair value adjustment balance needed:
Federal would record the $10,615,924 as a gain in the 2009 income statement:
In the balance sheet, the bonds are reported among long-term liabilities at their
$730,000,000 fair value:
Requirement 2
If the fair value at December 31, 2010, is $736,000,000 a year later, Federal
needs to compare that amount with the amortized initial measurement on that date.
That amount was increased when Federal recorded interest during 2010:
Comparing the amortized initial amount at December 31, 2010, with the fair value
on that date provides the Fair value adjustment balance needed:
In the balance sheet, the bonds are reported among long-term liabilities at their
$736,000,000 fair value:
2. Amortization schedule