Question
1. Company Prouve issued a 4 year bond on January 1, 2016. The par value was $40,000 and the coupon rate was 12%. Coupon payments
1. Company Prouve issued a 4 year bond on January 1, 2016. The par value was $40,000 and the coupon rate was 12%. Coupon payments are made semi-annually, on June 30 and December 31 of every year. The market interest rate on January 1, 2016 was 10% and on January 1, 2018 was 12%. The net book value of the bond on January 1, 2018 was $42,029. 1) Record the journal entry related to the issuance of this bond, to be recorded on 1/1/2016. Round final values to the nearest dollar. (ex. 12.6 ->12; 12.3 ->12) (4 points) 2) Record the journal entry related to the bond, to be recorded on 6/30/2016. Round final values to the nearest dollar. (ex. 12.6 ->12; 12.3 -> 12) (4 points) 3) Record the journal entry related to the bond, to be recorded on 6/30/2018. Round final values to the nearest dollar. (ex. 12.6 ->12; 12.3 ->12) (3 points) 4) What is the net book value of bond payable after the journal entry recorded on 6/30/2018 (i.e., the journal entry recorded in Question 3)? No need to show your work. Round final values to the nearest dollar. (ex. 12.6 ->12; 12.3 -> 12) (2 points)
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