BONDS HOW DO I ANSWER QUESTION 3&4&5?

1. Use the present value tables to calculate the issue price and make the journal entry of a

$100,000 bond issue in each of the following independent cases. Assume that the bond was

issued on January 1, 2010 and that interest is paid semi-annually on June 30 and December 31.

A) A 10-year, 8 percent bond issue; the market interest rate is 10 percent

B) A 10-year, 8 percent bond issue; the market interest rate is 6 percent

C) A 10-year, 10 percent bond issue; the market interest rate is 8 percent

D) A 20-year, 10 percent bond issue; the market interest rate is 12 percent

E) A 20-year,10 percent bond issue; the market interest rate is 6 percent

F) A 15-year,12 percent bond issue; the market interest rate is 10 percent

G) A 15-year, 10 percent bond issue; the market interest rate is 12 percent

2. Use the present value tables to calculate the issue price of a $500,000 bond issue in each of the

following independent cases. Assume that the bond was issued on January 1, 2010 and that

interest is paid quarterly on March 31, June 30 September 30 and December 31.

A) A 10-year, 8 percent bond issue; the market interest rate is 12 percent

B) A 10-year, 12 percent bond issue; the market interest rate is 8 percent

C) A 5-year, 12 percent bond issue; the market interest rate is 8 percent

D) A 5-year, 8 percent bond issue; the market interest rate is 12 percent

3. Using the information from question # 1a and 1b above, prepare the amortization schedules and

make the entry to record the interest expense for the years 2010, 2011 & 2012

4. Using the information from question #3, make the journal entry to record the retirement on

bonds on January 1, 2013 at the following independent prices

A) 95

B) 106

5. Using the information from question # 1a and 1b above, assume that interest is paid on January

1 and July 1. Prepare the amortization schedules and make the entry to record the interest

expense for the years 2010, 2011 & 2012