Bringham Company issues bonds with a par value of $540,000 on their stated issue date. The bonds mature in 6 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. (Table B.1. Table B.2, Table B.3, and Table B.4 (Use appropriate factor(s) from the tables provided.) points Skipped 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made on these bonds over their life? 3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium. 4. Compute the price of the bonds as of their issue date. 5. Prepare the journal entry to record the bonds' issuance. eBook Complete this question by entering your answers in the tabs below. Hint Req 1 to 3 Reg 4 Reg 5 Print What is the amount of each semiannual interest payment for these bonds? How many semiannual interest payments will be made on these bonds over their life? Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium. References Par (maturity) value Semiannual Rate Semiannual cash interest payment Number of payments Whether the bonds are issued at par, at a discount, or at a premium? Req 1 to 3 Req 4 > Bringham Company issues bonds with a par value of $540,000 on their stated issue date. The bonds mature in 6 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. (Table B.1, Table B.2. Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made on these bonds over their life? 3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium. 4. Compute the price of the bonds as of their issue date. 5. Prepare the journal entry to record the bonds' issuance. Complete this question by entering your answers in the tabs below. Reg 1 to 3 Reg 4 Reg 5 Compute the price of the bonds as of their issue date. (Round all table values to 4 decimal places, and use the rounded table values in calculations. Round intermediate calculations to the nearest dollar amount.) Table Values are Based on: Cash Flow Table Value Amount Present Value Par (maturity) value Interest (annuity) Price of bonds Bringham Company issues bonds with a par value of $540,000 on their stated issue date. The bonds mature in 6 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. Table B.1. Table B.2. Table B.3. and Table B.4 (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made on these bonds over their life? 3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium. 4. Compute the price of the bonds as of their issue date. 3. Prepare the journal entry to record the bonds' issuance. Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 4 Reg 5 Prepare the journal entry to record the bonds' issuance. (Round intermediate calculations to the nearest dollar amount.) View transaction list Journal entry worksheet Record the issue of bonds with a par value of $540,000 for cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal TABLE B.1* Present Value of 1 p=1/(1 + i)" Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 1 0 .8696 0.7561 No co own 0.9901 0.9803 0.9706 0.9610 0.9515 0.9420 0.9327 0.9235 0.9143 0.9053 0.8963 0.8874 0.8787 0.8700 0.8613 0.8528 0.8444 0.8360 0.8277 0.8195 0.9804 0.9612 0.9423 0.9238 0.9057 0.8880 0.8706 0.8535 0.8368 0.8203 0.8043 0.7885 0.7730 0.7579 0.7430 0.7284 0.7142 0.7002 0.6864 0.6730 0.6095 0.5521 0.5000 0.4529 0.9709 0.9615 0.9426 0.9246 0.9151 0.8890 0.8885 0.8548 0.8626 0.8219 0.8375 0.7903 0.8131 0.7599 0.7894 0.7307 0.7664 0.7026 0.7441 0.6756 0.7224 0.6496 0.7014 0.6246 0.6810 0.6006 0.6611 0.5775 0.6419 0.5553 0.6232 0.5339 0.6050 0.5134 0.5874 0.4936 0.5703 0.4746 0.5537 0.4564 0.4776 0.3751 0.4120 0.3083 0.3554 0.2534 0.30660.2083 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 0.5847 0.5568 0.5303 0.5051 0.4810 0.4581 0.4363 0.4155 0.3957 0.3769 0.2953 0.2314 0.1813 0.1420 0.9434 0.8900 0.8396 0.7921 0.7473 0.7050 0.6651 0.6274 0.5919 0.5584 0.5268 0.4970 0.4688 0.4423 0.4173 0.3936 0.3714 0.3503 0.3305 0.3118 0.2330 0.1741 0.1301 0.0972 0.9346 0.8734 0.8163 0.7629 0.7130 0.6663 0.6227 0.5820 0.5439 0.5083 0.4751 0.4440 0.4150 0.3878 0.3624 0.3387 0.3166 0.2959 0.2765 0.2584 0.1842 0.1314 0.0937 0.0668 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 0.3405 0.3152 0.2919 0.2703 0.2502 0.2317 0.2145 0.1460 0.0994 0.0676 0.04600 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 0.3875 0.3555 0.3262 0.2992 0.2745 0.2519 0.2311 0.2120 0.1945 0.1784 0.1160 0.0754 0.0490 .0318 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 0.2897 0.2633 0.2394 0.2176 0.1978 0.1799 0.1635 0.1486 0.0923 0.0573 0.0356 0.0221 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 0.2875 0.2567 0.2292 0.2046 0.1827 0.1631 0.1456 0.1300 0.1161 0.1037 0.0588 0.0334 0.0189 0.0107 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472 0.2149 0.1869 0.1625 0.1413 0.1229 0.1069 0.0929 0.0808 0.0703 0.0611 0.0304 0.0151 0.0075 0.0037 0.7798 0.7419 0.7059 0.6717 * Used to compute the present value of a known future amount. For example: How much would you need to invest today at 10% compounded semiannually to accumulate $5,000 in 6 years from today? Using the factors of n= 12 and i = 5% (12 semiannual periods and a semiannual rate of 5%), the factor is 0.5568. You would need to invest $2,784 today ($5,000 x 0.5568). TABLE B.2 f= (1 + i)" Future Value of 1 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 00 1.0000 1.0100 1.0201 1.0303 1.0406 1.0510 1.0615 1.0721 1.0829 1.0937 1.1046 1.1157 1.1268 1.1381 1.1495 1.1610 1.1726 1.1843 1.1961 1.2081 1.2202 1.2824 1.3478 1.4166 1.4889 1.0000 1.0000 1.0000 1.0200 1.0300 1.0400 1.0404 1.0609 1.0816 1.0612 1.0927 1.1249 1.0824 1.1255 1.1699 1.1041 1.1593 1.2167 1.1262 1.1941 1.2653 1.1487 1.2299 1.3159 1.1717 1.2668 1.3686 1.1951 1.3048 1.4233 1.21901.3439 1.4802 1.2434 1.3842 1.5395 1.2682 1.4258 1.6010 1.2936 1.4685 1.6651 1.3195 1.5126 1.7317 1.34591.5580 1.8009 1.3728 1.6047 1.8730 1.4002 1.6528 1.9479 1.4282 1.7024 2.0258 1.4568 1.7535 2.1068 1.4859 1.8061 2.1911 1.6406 2.0938 2.6658 1.8114 2.4273 3.2434 1.99992.81393.9461 2.2080 3.2620 4.8010 1.0000 1.0500 1.1025 1.1576 1.2155 1.2763 1.3401 1.4071 1.4775 1.5513 1.6289 1.7103 1.7959 1.8856 1.9799 2.0789 2.1829 2.2920 2.4066 2.5270 2.6533 3.3864 4.3219 5.5160 7.0400 1.0000 1.0600 1.1236 1.1910 1.2625 1.3382 1.4185 1.5036 1.5938 1.6895 1.7908 1.8983 2.0122 2.1329 2.2609 2.3966 2.5404 2.6928 2.8543 3.0256 3.2071 4.2919 .7435 7.6861 10.2857 1.0000 1.0700 1.1449 1.2250 1.3108 1.4026 1.5007 1.6058 1.7182 1.8385 1.9672 2.1049 2.2522 2.4098 2.5785 2.7590 2.9522 3.1588 3.3799 3.6165 3.8697 5.4274 7.6123 10.6766 14.9745 1.0000 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 2.5182 2.7196 2.9372 3.1722 3.4259 3.7000 3.9960 4.3157 4.6610 6.8485 10.0627 14.7853 21.7245 1.0000 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2.1719 2.3674 2.5804 2.8127 3.0658 3.3417 3.6425 3.9703 4.3276 4.7171 5.1417 5.6044 8.6231 13.2677 20.4140 31.4094 1.0000 1.0000 1.1000 1.1200 1.2100 1.2544 1.3310 1.4049 1.4641 1.5735 1.6105 1.7623 1.7716 1.9738 1.9487 2.2107 2.1436 2.4760 2.3579 2.7731 2.5937 3.1058 2.8531 3.4785 3.1384 3.8960 3.4523 4.3635 3.7975 4.8871 4.1772 5.4736 4.5950 6.1304 5.0545 6.8660 5.5599 7.6900 6.1159 8.6128 6.7275 9.6463 10.834717.0001 17.4494 29.9599 28.1024 52.7996 45.2593 9 3.0510 1.0000 1.1500 1.3225 1.5209 1.7490 2.0114 2.3131 2.6600 3.0590 3.5179 4.0456 4.6524 5.3503 6.1528 7.0757 8.1371 9.3576 10.7613 12.3755 14.2318 16.3665 32.9190 66.2118 133.1755 267.8635 14 5 Used to compute the future value of a known present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly for 5 years? Using the factors of n= 20 and i = 2% (20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ($3,000 x 1.4859). p= [1-] TABLE B.3 Present Value of an Annuity of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% Noooo on WN 7 0.9901 1.9704 2.9410 3.9020 4.8534 5.7955 6.7282 7.6517 8.5660 9.4713 10.3676 11.2551 12.1337 13.0037 13.8651 14.7179 15.5623 16.3983 1 7.2260 1 8.0456 22.0232 25.8077 29.4086 32.8347 0.9804 0.9709 1.9416 1.9135 2.88392.8286 3.8077 3.7171 4.7135 4.5797 5.6014 5.4172 6.4720 6.2303 7.3255 7.0197 8.1622 7.7861 8.9826 8.5302 9.7868 9.2526 10.5753 9.9540 11.3484 10.6350 12.1062 11.2961 12.8493 11.9379 13.5777 12.5611 14.291913.1661 14.9920 13.7535 15.6785 14.3238 16.3514 14.8775 19.5235 17.4131 22.3965 19.6004 2 27.3555 23.1148 0.9615 1.8861 2.7751 3.6299 4.4518 5.2421 6.0021 6.7327 7.4353 8.1109 8.7605 9.3851 9.9856 10.5631 11.1184 11.6523 12.1657 12.6593 13.1339 13.5903 15.6221 17.2920 18.6646 19.7928 0.9524 0.9434 1.8594 1.8334 2.7232 2.6730 3.5460 3.4651 4.3295 4.2124 5.0757 4.9173 5.7864 5.5824 6.4632 6.2098 7.1078 6.8017 7.7217 7.3601 8.3064 7 .8869 8.8633 8.3838 9.3936 8.8527 9.8986 9.2950 10.37979.7122 10.8378 10.1059 11.2741 10.4773 11.6896 10.8276 12.0853 11.1581 12.4622 11.4699 14.0939 12.7834 15.3725 13.7648 16.3742 14.4982 17.1591 15.0463 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.8080 1.7833 1.7591 1.7355 1.6901 1.6257 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.3872 3.3121 3.2397 3.16993.0373 2.8550 4.1002 3.9927 3.8897 3.7908 3.6048 3.3522 4.7665 4.6229 4.48594.3553 4.1114 3.7845 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 7.0236 6.71016.4177 6.1446 5.6502 5.0188 .4987 7.1390 6.8052 6.4951 5.9377 5.2337 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 8.3577 7.9038 7.48697.1034 6.4235 5.5831 8.7455 8.2442 7.78627.3667 6.6282 5.7245 9.1079 8.5595 8.0607 7.6061 6.81095.8474 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 10.05919.3719 8.7556 8.2014 7.2497 6.1280 10.3356 9.6036 8.9501 8.36497.3658 6.1982 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 11.6536 10.6748 9 .8226 9 12.4090 11.2578 10.27379.42698.0552 6.5660 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 19 20 *Used to calculate the present value of a series of equal payments made at the end of each period. For example: What is the present value of $2,000 per year for 10 years assuming an annual interest rate of 9%. For (n= 10,i=9%), the PV factor is 6.4177. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 X 6.4177)