Question
Blossom Products Ltd. issued $3.6 million of 7%, 5-year bonds on January 1, 2021. The bonds were dated January 1 and pay interest annually. There
Blossom Products Ltd. issued $3.6 million of 7%, 5-year bonds on January 1, 2021. The bonds were dated January 1 and pay interest annually. There is no collateral secured against the bonds and Blossom Products may buy back the bonds at any time. The market interest rate was 8% for these bonds. Blossom has a calendar year end.
q.1 Calculate the price of the bonds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 0 decimal places, e.g. 1,575.)
q.2 Record the bond issue. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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