Chapter 9
Investments
475
Case Study
CS-1 (
2
)
A five-year bond of $500,000 was issued on March 1, 2016 with the coupon rate of 6%. The
market interest rate was 4% at that time. Interests are paid semi-annually on March 1 and
September 1 every year. Both the issuer and the investor have a year-end date on December
31. Assume both the investor and issuer follow IFRS.
Required
a) Using the Present Value Factors, prepare an amortization table from the issuance date to
maturity.
Interest Period
A
Interest Payment
B
Interest
Expense/Revenue
C
Premium
Amortization
D
Bond
Amortized Cost
