ALL SEPARATE PROBLEMS :)

1. Term Bond

Company A issued an 8 year, $2,000,000 5% bond on Jan. 1, 2018. Interest is payable

each December 31. The bond sold for $1,958,000. The issue costs were $30,000. The

issue costs are merged with any discount or premium to calculate a single effective

interest rate. 60% of the bonds are retired on April 1, 2021 at 101 plus accrued interest.

Calculate the effective interest rate. Make all needed entries on January 1, 2018, December

31, 2018, April 1, 2021 and December 31, 2021. Include an amortization table for all years.

2. Zero Coupon Bond

B Company sold a $5,000,000, 8 year zero coupon (zero interest paid) bond on January 1,

2018 to yield an effective interest rate of 7% annual.

Calculate the sale price of the bond. Prepare an 8 year amortization schedule. Make any

required entry on December 31, 2021 and on Dec. 31, 2025.

3. Serial Bond

C Company sold a $1,000,000 serial bond on January 1, 2018 with $250,000 of bonds

due December 31, 2020, December 31, 2022, December 31,2024, and December 31,

2025. The bonds have a stated interest rate of 6%, but were sold to yield an effective rate

of 6.5% annual.

Prepare an effective interest amortization table. Make all required entries on December 31,

2022

4. Bonds Issued between Interest Dates

D Company planned on Issuing bonds $2000,000 on January 1, 2018 but due to slowdowns

the bonds were not sold until April 1, 2018. These 8 year bonds pay 6% interest annually

each December 31st and were sold to yield 5.5%.

Prepare and amortization table for these bonds and the entry to record their issuance and the

first payment on December 31, 2018.