ABC Enterprises issues $400,000 of bonds paying a stated interest rate of 7%. The bonds are due in 10 years, with interest payable annually each year on Jan. 1^st. When the bonds are issued, other bonds of similar risk and maturity are paying 11% (i.e. the discount rate or market interest rate is 11%).

Calculate the issuance (selling) price of this bond:

Present value of interest payments (annuity portion)	_______ (int. payment) * _______(factor)_ =
Present Value of Bond Principal (single sum value)	400,000 (principal) * ________(factor)_=
Total Present Value, or selling price

Is the bond issued at a premium, discount, or face value (par)?

On June 4^rd Chandler & Monica Grocery Store collected sales of $5,000 and sales taxes of $200. What is the journal entry that Chandler & Monica Grocery Store needs to record for this activity? (You may or may not need all rows of this textbox)

Gunther Company purchased a building on January 1^st by signing a long-term $4,500,000 mortgage with monthly payments of $50,125. The mortgage carries an interest rate of 8%.

Write the journal entry to record the purchase of the building by signing the long-term mortgage. (You may or may not need all rows of this textbox)

Write the journal entry to record the first monthly payment (Jan. 31^st) by Gunther. (You may or may not need all rows of this textbox)

What is the balance in the Mortgage Payable account, after this first monthly payment is recorded?

Write the journal entry to record the second monthly payment (Feb. 28^th) by Gunther. (You may or may not need all rows of this textbox)

What is the balance in the Mortgage Payable account, after this second monthly payment is recorded?

Mike Company issued $5,000,000 of 8%, 10-year bonds on January 1, 2014, for $4,731,582. The market or effective interest rate is 9%. Interest is paid annually on each January 1^st, and the effective-interest method of amortization is to be used.

Provide the journal entry to record issuance of these long-term bonds. (You may or may not need all rows of this textbox).

Provide the end of the year adjusting journal entry (for Dec. 31, 2014) to record accrued Interest Expense for this bond (using the effective-interest method of amortization). (You may or may not need all rows of this textbox).

Provide the journal entry required on Jan. 1, 2015, when the interest is paid. (You may or may not need all rows of this textbox).

Using a T account post (show) the above entries to the Discount on Bond Payable T-account. What is the accounts balance?

What is the Bond Carrying Value that would appear on Mikes 12/31/14 Balance Sheet?