Question
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $1,800,000 of 10-year, 9% bonds
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $1,800,000 of 10-year, 9% bonds at a market (effective) interest rate of 11%, receiving cash of $1,584,895. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. Compute the price of $1,584,895 received for the bonds by using the Present value at compound interest, and Present value of an annuity. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences.
| Present value of the face amount | |
| Present value of the semiannual interest payments | |
| Price received for the bonds |
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Principles of Accounting
Authors: Needles, Powers, crosson
11th Edition
1439037744, 978-1133626985, 978-1439037744
