E 14-3 The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

Required:

1. Determine the price of the bonds at January 1, 2018.
2. Prepare the journal entry to record their issuance by The Bradford Company on January 1, 2018.
3. Prepare the journal entry to record interest on June 30, 2018 (at the effective rate).
4. Prepare the journal entry to record interest on December 31, 2018 (at the effective rate).

I AM LOOKING FOR ANSWER FOR THIS QUESTION BELOW:

E 14-4 (Note: This is a variation of E 143modified to consider the investors perspective.) The Bradford Company sold the entire bond issue described in the previous exercise to Saxton-Bose Corporation.

Required:

1. Prepare the journal entry to record the purchase of the bonds by Saxton-Bose1/1/18.
2. Prepare the journal entry to record interest revenue on June 30, 2018 (at the effective rate).
3. Prepare the journal entry to record interest revenue on December 31, 2018 (at the effective rate).
4. Prepare the journal entry to record interest revenue on June 30, 2018 (at the effective rate).
5. Prepare the journal entry to record interest revenue on December 31, 2018 (at the effective rate).

Requirement 1 - Price of the Bonds on January 1st Interest $4,000,000 X 11.46992 $45,879,680 Principal $80,000,000 X 0.31180 $24,944,000 Present Value of the bonds (cash paid for bonds) $70,823,680 Requirement 2 - Journal Entry January 1st Cash (present value) $70,823,680 Discount on bond payable $9,176,320 Bonds payable 80,000,000 Requirement 3 - Journal Entry June 30th (First interest payment) Interest Expense $4,249,421 Discount on bond payable 249,420,80 Cash 4,000,000 Requirement 4 - Journal Entry December 31st (Second interest payment) Interest Expense $4,264,386 Discount on bond payable 264,386 Cash 4,000,000 Price of the bonds at January 1st ? ? U. ? Requirement 1 - Journal Entry January 1st Bond Investment $80,000,000 ? ? Requirement 2 - Journal Entry June 30th (First interest payment) ? ? $4,249,421 Interest Revenue Requirement 3 - Journal Entry December 31st (Second interest payment) Cash (5% X $80,000,000) $4,000,000