Answer:
Myriad Solutions, Inc.
The net amount of the liability that Myriad would report in its balance sheet at December 31, 2021 is:
= $314,793,494
Explanation:
a) Data and Calculations:
Face value of bonds = $350 million
Discounted value (Cash receipt) = $312,921,210
Total amount of discount = $37,078,790
Bond's interest rate = 12%
Market yield = 14%
June 30, 2021:
Cash payment for interest = $21 million ($350 m * 6%)
Bonds' Interest expense = $21,904,485 ($312,921,210 * 7%)
Amortization of bond discount = $904,485 ($21,904,485 - $21 million)
Bond book value = $313,825,695 ($312,921,210 + $904,485)
Dec. 31, 2021:
Cash payment for interest = $21 million ($350 m * 6%)
Bonds' Interest expense = $21,967,799 ($313,825,695 * 7%)
Amortization of bond discount = $967,799 ( $21,967,799 - $21 million)
Bond book value = $314,793,494 ($313,825,695 + $967,799)
