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

States look to unclaimed property for revenue

This free report outlines the escheat process, common types of AUP, how different states are handling it and how companies can plan for potential audits and liabilities.

PODCAST

Using drones to enhance audits

Hermann Sidhu, CPA, global assurance digital leader at EY, walks us through EY’s exciting new project to use drones to help audit large warehouses and outdoor inventories.