Problem #1
You must use an “Excel” spreadsheet for your answers. Be sure to show all computations in order to receive full credit.

Avilon Corp, needs to raise a minimum of $50,000,000 for a major expansion. The Board of Directors is considering selling bonds to raise the required amount. The three options they are considering are as follows:

#1) $50,000,000, 15 year, 6% bonds; interest paid semi-annually; sold to yield 8%.

#2) $50,000,000, 15 year, 6% bonds, interest paid semi-annually; sold to yield 4%.

#3) $50,000,000, 15 year, 6% bonds, interest paid semi-annually; sold to yield 6%.

Required: 1) Compute the selling price of the bonds under the three different
options.

For option #1, prepare an amortization schedule using the effective interest method. Be sure to adjust the last payment’s interest,
up or down, so that the bond carrying value equals $50,000,000.

Indicate what option would be the best, and support your answer.

Problem #2 You must use or an “Excel” spreadsheet for your answers.

Sixnut, Incorporated has been authorized to issue 1,000,000 shares of $2 par common stock, and 50,000 shares of 6%, $100 par, cumulative, preferred stock. During the first six months of operation, the following transactions occurred related to the stock.

Jul 1st Sold 150,000 shares of common stock for $10 per share, and 25,000
shares of preferred stock, sold at par.

Jul 1st Issued 100,000 shares of common stock in exchange for the following
assets: Land $250,000
Building 750,000
Equipment 300,000
Inventory 200,000

The market value of the stock was $15 per share.

Sep 1st Sold 100,000 shares of common stock for $20 per share.

Oct 31st Repurchased 30,000 shares of common stock for $25 per share. Sixnut
has elected to use the cost method to account for the treasury stock.

Nov 30th Re-sold 20,000 shares of the treasury stock for $35 per share.

Dec 31st Recorded net income for…