1. On January 1, 2015, TJC Company started to make annual deposits in order to accumulate $1,600,000 by January 1, 2019. This fund will earn annual interest of 9%.
Required:
What are the four annual deposits that TJC should make at the beginning of each year. Round your answers to the nearest whole dollar.
Exercise 1
VRHR corp issues a $3,000,000 bond at 10% for 8 years. The market interest rate is 9%.
Required:
1. What is the issue price of these bonds and the bond discount or premium?
2. Assume that VRHR corp uses the effective interest method to amortize the bond discount or premium for the annual interest payments, what is the interest expense and the amount of cash paid the second interest payment?
Exercise 2
Sunshine Company purchased equipment for $100,000 in 2012. The machinery originally had an estimated life of 8 years and a salvage value of $10,000. Sunshine used the straight-line depreciation method. In 2016, the estimated life was changed to 11 years.
Required: What is the annual depreciation expense for 2016?