meet_ex5


Exhibit 5: Amortization of Bond Discount Using the Interest Method
$400,000 of 9%, five-year bonds (semi-annual interest payments) sold to yield 10% at January 1, 2001.

Selling price is calculated as follows:

Present value of $400,000 in 5 years $400,000 0.61391 $245,564.00  
Present value of interest payments $18,000 7.72173 $138,991.14
$384,555.14
 
Date Cash
payment
Interest expense Discount amortization Carrying value of bonds
January 1, ’01 — — — $384,555.14
July 1, ’01 $18,000.00 $19,227.76 $1,227.76 $385,782.90
January 1, ’02 $18,000.00 $19,289.14 $1,289.14 $387,072.04
July 1, ’02 $18,000.00 $19,353.60 $1,353.60 $388,425.64
January 1, ’03 $18,000.00 $19,421.28 $1,421.28 $389,846.93
July 1, ’03 $18,000.00 $19,492.35 $1,492.35 $391,339.27
January 1, ’04 $18,000.00 $19,566.96 $1,566.96 $392,906.24
July 1, ’04 $18,000.00 $19,645.31 $1,645.31 $394,551.55
January 1, ’05 $18,000.00 $19,727.58 $1,727.58 $396,279.13
July 1, ’05 $18,000.00 $19,813.96 $1,813.96 $398,093.08
January 1, ’06 $18,000.00 $19,906.92* $1,906.92 $400,000.00
*$2.27 rounding error

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

COLUMN

Deflecting clients’ requests for defense and indemnity

Client requests for defense and indemnity by the CPA firm are on the rise. Requests for such clauses are unnecessary and unfair, and, in some cases, are unenforceable.