# 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

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