Interest PAY Interest Expense Amortization Carrying Amount

1/1/2023 2,845,278.00
12/31/2023 180,000.00 227,622.24 47,622.24 2,892,900.24
12/31/2024 180,000.00 231,432.02 51,432.02 2,944,332.26
12/31/2025 180,000.00 235,546.58 55,546.58 2,999,878.84

1/1/2023 1/1/2023
Land 3,000,000.00 Land
Notes Payable 3,000,000.00

12/31/2023 12/31/2023
Interest Expense 180,000.00 Interest Expense
Interest Payable 180,000.00

Notes Payable

1/1/2024 1/1/2024
Interest Payable 180,000.00 Interest Payable
Cash 180,000.00

12/31/2024 12/31/2024
Interest Expense 180,000.00 Interest Expense
Interest Payable 180,000.00
 a
How much is the interest expense on 12/31/23? 745,105.20
How much is the carrying amount of the notes payable on 12/31/23? 8,196,157.20
How much is the interest expense on 12/31/24? 819,615.72
How much is the current portion of the notes payable on 12/31/24? -

CASE A PV
Principal 12,000,000.00 0.6209 7,451,052.00 Principal

Interest Expense Carrying Amount

1/1/2023 7,451,052.00 1/1/2023
12/31/2023 745,105.20 8,196,157.20 12/31/2023
12/31/2024 819,615.72 9,015,772.92 12/31/2024
12/31/2025 901,577.29 9,917,350.21 12/31/2025
12/31/2026 991,735.02 10,909,085.23 12/31/2026
12/31/2027 1,090,908.52 11,999,993.76 12/31/2027

1/1/2023 1/1/2023
Building 7,451,052.00 Building
Discount on Notes Payable 4,548,948.00 Discount on Notes Payable
Notes Payable 12,000,000.00

12/31/2023 12/31/2023
Interest Expense 745,105.20 Interest Expense
Discount on Notes Payable 745,105.20

12/31/2023 Notes Payable

Interest Expense 819,615.72
Discount on Notes Payable 819,615.72
12/31/2024
Interest Expense

Notes Payable
 A
How much is the current liabilities on 12/31/23? 180,000.00
How much is the non-current liabilities on 12/31/23? 3,000,000.00
How much is the current liabilities on 12/31/24? 3,180,000.00
How much is the non-current liabilities on 12/31/24? -
How much is the interest expense recorded on 12/31/24? 180,000.00

Principal 3,000,000.00 0.7938 2,381,400.00

Interest 180,000.00 2.5771 463,878.00
PV 2,845,278.00
Face 3,000,000.00
Discount 154,722.00

1/1/2023
3,000,000.00 Land
Notes Payable 3,000,000.00 Discount on Notes Payable

12/31/2023
est Expense 180,000.00 Interest Expense
Interest Payable 180,000.00

1,000,000.00
Cash 1,000,000.00

1/1/2024
est Payable 180,000.00 Interest Payable
Cash 180,000.00

12/31/2024
est Expense 120,000.00 Interest Expense
Interest Payable 120,000.00

10%
PV of 1, 5 periods 0.620921
PVOA, 5 periods 3.790787
PV Annuity Due, 6 periods 4.790787
PVOA, 4 periods 3.169865
 b c d
909,788.88 760,767.60 310,460.50
7,607,677.68 5,968,443.60 7,761,512.50
760,767.77 596,844.36 776,151.25
1,803,155.46 - -

PV
2,400,000.00 3.7908 9,097,888.80 Principal

Interest Expense Principal Pay Carrying Amount 1/1/2023

9,097,888.80
909,788.88 (2,400,000.00) 7,607,677.68 12/31/2023
760,767.77 (2,400,000.00) 5,968,445.45 12/31/2024
596,844.54 (2,400,000.00) 4,165,289.99 12/31/2025
416,529.00 (2,400,000.00) 2,181,818.99 12/31/2026
218,181.90 (2,400,000.00) 0.89

1/1/2023
9,097,888.80 Building
unt on Notes Payable 2,902,111.20 Discount on Notes Payable
Notes Payable 12,000,000.00

Notes Payable
est Expense 909,788.88
Discount on Notes Payable 909,788.88
12/31/2023
2,400,000.00 Interest Expense
Cash 2,400,000.00

Notes Payable
est Expense 760,767.77
Discount on Notes Payable 760,767.77
12/31/2024
2,400,000.00 Interest Expense
Cash 2,400,000.00

Notes Payable
 B C
1,180,000.00 180,000.00
2,000,000.00 2,892,900.24
1,120,000.00 3,124,332.26
- -
120,000.00 231,432.02

2,845,278.00
n Notes Payable 154,722.00
Notes Payable 3,000,000.00

227,622.24
Discount on Notes Payable 47,622.24
Interest Payable 180,000.00

180,000.00
Cash 180,000.00

231,432.02
Discount on Notes Payable 51,432.02
Interest Payable 180,000.00

0.620921
3.790787
4.790787
3.169865
 CASE D

1/1/2023
PVOA 4 + 1 YEAR 1
2,400,000.00 4.17 10,007,676.00
Interest Expense Principal Pay Carrying Amount YEAR 2
10,007,676.00 12M-2.4M
(2,400,000.00) 7,607,676.00 YEAR 3
760,767.60 (2,400,000.00) 5,968,443.60
596,844.36 (2,400,000.00) 4,165,287.96 YEAR 4
416,528.80 (2,400,000.00) 2,181,816.76
218,181.68 (2,400,000.00) (1.57) YEAR 5

7/1/2023
10,007,676.00 Building
n Notes Payable 1,992,324.00 Discount on Notes Payable
Notes Payable 12,000,000.00

2,400,000.00 12/31/2023
Cash 2,400,000.00 Interest Expense

760,767.60 12/31/2024
Discount on Notes Payable 760,767.60 Interest Expense

2,400,000.00
Cash 2,400,000.00

596,844.36
Discount on Notes Payable 596,844.36

2,400,000.00
Cash 2,400,000.00
 Interest Expense Carrying Amount
7,451,052.00
745,105.20 Aug-Dec 2023 310,460.50 7,761,512.50
Jan-July 2024 434,644.70 8,196,157.20
819,615.72 Aug-Dec 2024 341,506.55 8,537,663.75
Jan-July 2025 478,109.17 9,015,772.92
901,577.29 Aug-Dec 2025 375,657.21 9,391,430.13
Jan-July 2026 525,920.09 9,917,350.21
991,735.02 Aug-Dec 2026 413,222.93 10,330,573.14
Jan-July 2027 578,512.10 10,909,085.23
1,090,908.52 Aug-Dec 2027 454,545.22 11,363,630.45
Jan-July 2028 636,363.31 11,999,993.76

7,451,052.00
scount on Notes Payable 4,548,948.00
Notes Payable 12,000,000.00

terest Expense 310,460.50

Discount on Notes Payable 310,460.50

terest Expense 776,151.25

Discount on Notes Payable 776,151.25
 Date
Face Amount 10,000,000.00 1/1/2023
Lss: Origination fees (465,075.00) 12/31/2023
Loan payable, initial carrying amount 9,534,925.00 12/31/2024
12/31/2025
1/1/2023 12/31/2026
Cash 9,534,925.00 12/31/2027
Discount on Loans Payable 465,075.00
Loans Payable 10,000,000.00
How much is the amortization on 12/31
12/31/2023 How much is the balance of discount on
Interest Expense 1,144,191.00 How much is the interest expense on 1
Discount on Loans Payable 144,191.00
Cash 1,000,000.00

Loans Payable 2,000,000.00

Cash 2,000,000.00

12/31/2024
Interest Expense 921,493.92
Discount on Loans Payable 121,493.92
Cash 800,000.00

Loans Payable 2,000,000.00

Cash 2,000,000.00

Future Cash flows 1,200,000.00 Monthly Payment

Divide by: PVOA 12% 24 8.98 x number of payments
Future Cash Flows 133,559.73 Total Cash Payments
Less: PV
Total interest payment of the
 Interest Pay Interest Exp Amortization Principal Carrying Amount Discount on LP
9,534,925.00 465,075.00
1,000,000.00 1,144,191.00 144,191.00 2,000,000.00 7,679,116.00 320,884.00
800,000.00 921,493.92 121,493.92 2,000,000.00 5,800,609.92 199,390.08
600,000.00 696,073.19 96,073.19 2,000,000.00 3,896,683.11 103,316.89
400,000.00 467,601.97 67,601.97 2,000,000.00 1,964,285.08 35,714.92
200,000.00 235,714.21 35,714.21 2,000,000.00 (0.71) -

ow much is the amortization on 12/31/23? 144,191.00

ow much is the balance of discount on loans payable on 1 199,390.08
ow much is the interest expense on 12/31/24? 921,493.92

0.826446
1.735537
0.101526
8.984744

onthly Payment 133,559.73

number of payments 24.00
otal Cash Payments 3,205,433.57
 2,000,000.00
otal interest payment of the 1,205,433.57
count on LP
Amortization of 900,000 premium Required:
Year Beg Bal % Amortization Carrying Amount of the bonds on
2,023.00 10,000,000.00 0.33 300,000.00 Interest Expense, 12/31/24
2,024.00 8,000,000.00 0.27 240,000.00 Current portion, carrying amount
2,025.00 6,000,000.00 0.20 180,000.00 Balance of the premium on bonds
2,026.00 4,000,000.00 0.13 120,000.00
2,027.00 2,000,000.00 0.07 60,000.00
30,000,000.00 900,000.00

1/1/2023
Cash 10,900,000.00
Premium on Bonds Payable 900,000.00
Bonds Payable 10,000,000.00

12/31/2023
Interest Expense 700,000.00
Premium on Bonds Payable 300,000.00
Cash 1,000,000.00

12/31/2023
Bonds Payable 2,000,000.00
Cash 2,000,000.00

12/31/2024
Interest Expense 760,000.00
Premium on Bonds Payable 240,000.00
Cash 1,000,000.00

12/31/2024
Bonds Payable 2,000,000.00
Cash 2,000,000.00

Year
2,023.00
 2,024.00
2,025.00
2,026.00
2,027.00
2,028.00
2,029.00
2,030.00

Date
1/1/2023
12/31/2023
12/31/2024
12/31/2025
12/31/2026
12/31/2027
12/31/2028
12/31/2029
12/31/2030

Carrying Amount of the bonds on

Interest expense on 2025
Balance of premium on 12/31/25
Noncurrent Portion, carrying amo

1/1/2023 How much is the initial carrying am

Cash 2,820,000.00 How much is the interest expense
Discount on Bonds Payable 180,000.00 How much is the discount amortiz
Bonds Payable 3,000,000.00 How much is the balance of the di

1/1/2023
Discount on Bonds Payable 100,000.00
Cash 100,000.00

12/31/2023 Interest Expense 250,000.00

Discount on Bond 70,000.00
Cash 180,000.00

12/31/2024 Interest Expense 250,000.00

 Discount on note 70,000.00
Cash 180,000.00

PV of 1 6 periods 12% 0.506631 Principal 8,000,000.00

PV of 1 8 periods 12% 0.403883 Interest 800,000.00
PVOA 6 periods 12% 4.111407
PVOA 8 periods 12% 4.967640
Date Interest Pay Interest Exp
1/1/2023
12/31/2023 800,000.00 881,060.83
12/31/2024 800,000.00 890,788.13
12/31/2025 800,000.00 901,682.71
12/31/2026 800,000.00 913,884.63
12/31/2027 800,000.00 927,550.79
12/31/2028 800,000.00 942,856.88

Carrying Amount of the bonds, 12/31/23

Balance of Discount on Bonds Payable 12/31/24
Interest Expense on 12/31/24
How much is the amortization of discount on 12/31/25?
ying Amount of the bonds on 12/31/24 6,360,000.00
est Expense, 12/31/24 760,000.00
ent portion, carrying amount of the bonds on 12/31/25 2,120,000.00
nce of the premium on bonds payable, 12/31/25 180,000.00

1M + Int
Interest TOTAL CASHFLOWS
8,000,000.00 960,000.00 1,960,000.00
 7,000,000.00 840,000.00 1,840,000.00
6,000,000.00 720,000.00 1,720,000.00
5,000,000.00 600,000.00 1,600,000.00
4,000,000.00 480,000.00 1,480,000.00
3,000,000.00 360,000.00 1,360,000.00
2,000,000.00 240,000.00 1,240,000.00
1,000,000.00 120,000.00 1,120,000.00

Payments Interest ExpenseAmortization Carrying Amoun Face Amount Premium on Bonds Payable
8,533,014.00 8,000,000.00 533,014.00
1,960,000.00 853,301.40 1,106,698.60 7,426,315.40 7,000,000.00 426,315.40
1,840,000.00 742,631.54 1,097,368.46 6,328,946.94 6,000,000.00 328,946.94
1,720,000.00 632,894.69 1,087,105.31 5,241,841.63 5,000,000.00 241,841.63
1,600,000.00 524,184.16 1,075,815.84 4,166,025.80 4,000,000.00 166,025.80
1,480,000.00 416,602.58 1,063,397.42 3,102,628.38 3,000,000.00 102,628.38
1,360,000.00 310,262.84 1,049,737.16 2,052,891.21 2,000,000.00 52,891.21
1,240,000.00 205,289.12 1,034,710.88 1,018,180.34 1,000,000.00 18,180.34
1,120,000.00 101,818.03 1,018,181.97 (1.63) - (1.63)

ying Amount of the bonds on 12/31/24 6,328,946.94

est expense on 2025 632,894.69
nce of premium on 12/31/25 241,841.63
current Portion, carrying amount of bonds 12/31/25 4,166,025.80

much is the initial carrying amount of the bonds recognized on 1/1/23? 2,720,000.00
much is the interest expense on 12/31/23? 250,000.00
much is the discount amortization on 2024? 70,000.00
much is the balance of the discount on bonds payable on 12/31/24? 140,000.00
 0.51 4,053,048.00
4.11 3,289,125.60
7,342,173.60

Amortization Carrrying AmounFace Amount Discount on BP

7,342,173.60 8,000,000.00 657,826.40
81,060.83 7,423,234.43 8,000,000.00 576,765.57
90,788.13 7,514,022.56 8,000,000.00 485,977.44
101,682.71 7,615,705.27 8,000,000.00 384,294.73
113,884.63 7,729,589.90 8,000,000.00 270,410.10
127,550.79 7,857,140.69 8,000,000.00 142,859.31
142,856.88 7,999,997.58 8,000,000.00 2.42

7,423,234.43
e 12/31/24 485,977.44
890,788.13
ount on 12/31/25? 101,682.71
mium on Bonds Payable