On January 1, 2013, Queen Corporation issued 12 year, 6 bonds payable with a face value of $10 million The bonds require semi annual coupon payments on June 30 and December 31 every year Fill in the blanks below to show the amounts and timing for contractual future cash flows for these bonds Lump s...

Lumpsum payment due at maturity FV 10 million Amount of each semiannual coupon payment pmt 0 ...

On January 1, 2013, Queen Corporation issued 12-year, 6% bonds payable with a face value of $10

Question:

On January 1, 2013, Queen issued 12-year, 6% bonds payable with a of $10 million. The bonds require semi-annual payments on June 30 and December 31 every year. Fill in the blanks below to show the amounts and timing for contractual future cash flows for these bonds.
Lump-sum payment due at (FV) = _________
Amount of each semi-annual payment (pmt) = ________
Number of periods from issue date to = _________
Total cash outflows required by these bonds = ___________
For this question, fill in the blanks below with the value of Queen's bonds on 1/1/13. The value represents the cash proceeds that Queen would receive when issuing these bonds.
(Annual) Market interest rate = 5% _____________
(Annual) Market interest rate = 8.3% ______________
Quoted market price = 92 ________________
For this question, assume that Queen issued these bonds on 1/1/13 in exchange for cash of $8,899,162. For the journal entries, you may choose to use a companion account or not.
Did Queen issue these bonds at par, premium, or discount?
What was the market interest rate PER PERIOD on 1/1/13? Prepare Queen's journal entry to recognize the issuance of these bonds on 1/1/13.
Prepare Queen's journal entry to recognize the payment on 6/30/13. Explain in words how you calculated the interest expense amount in your 6/30/13 journal
Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...