Contributed Capital

+ Retained Earnings

Shareholder's Equity (or Owner's Equity)

Beginning RE

+ Net Income

– Dividends

Ending RE

Bond Face Value

+ Unamortized Premium

– Unamortized Discount

Bond Carrying Value

Bond Payment Amount = Face Value of the Bond * Annual Coupon Rate / # of Payments Per Year

If a bond pays semi-annually, then there are two payments per year. If it's annual, then it's just 1 payment per year.

Bond Interest Expense = Carrying Value * Market Interest Rate

Bond Face Value * PV$1(i,n)

+ Payment Amount * PVOA(i,n)

Bond Selling Price

When calculating the selling price, be sure to use the Market Rate for i.

Cash Out

– Cash In

Cost of Borrowing (Bonds)

Cash Payments

– Premium

+ Discount

Cost of Borrowing (Bonds)