On July 1, 2011, Global Satellites Corporation issued $1.5 million of 10-year, 7% bonds to yield a

Question:

On July 1, 2011, Global Satellites issued $1.5 million of 10-year, 7% bonds to yield a market interest rate of 6%. The bonds pay semi-annual interest on July 1 and January 1. Global has a December 31 year end.
Instructions
(a) Calculate the bonds' present value (issue price) on July 1.
(b) Prepare an amortization table through January 1, 2013 (three interest periods) for this bond issue. Round all amounts to the nearest dollar.
(c) Record the issue of the bonds on July 1.
(d) Prepare the adjusting entry on December 31, 2012, to accrue the interest on the bonds.
(e) Show the statement of financial position presentation of the liabilities at December 31, 2012.
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...