E15-2

TER 15 O Exercises ctions (a) Is the mar ents about E1S-1 Nick Bosch has perepared the following list of statements about bonds. (c) Record t interest Bonds area form of interest-bearingnotes payable. bonds have specific assets of the issuer pledged as collateral for the bonds 3. Secured bonds are also ksown as debenture bonds the market interest E1S-8 Big April 1 and conversion feature may be added to bonds to make them more attractiv prices are asually quoted as a percentage of the Eace value of the bond. value of a bond is the value at which it should sell in the mar s. The used to determine the amount of cash interest the borrower pays is rate 6. Bond 7. T Ser Inte be present Instructions identify cach statement as true or false. If false, indicate how to correct the statement. value of bond AP EIS-2 Whittem re Corp. issued SS00000 of3 year, 4% bonds on May , 2012. The market r the bonds were issued was8%. Interest is payable quarterly Instructions (a) What is the number of interest payments that will be made over the life of the bond (b) How much interest will be paid each period? (c) Determine the price of the bond. (d) Prepare the journal entry to record the issuance of the bond. E15-3 interest payable semi-annually Instructions lue of Central College is about to issue si million of 10-year bonds that pay a 6% annual Instr Calculate the issue price of these bonds if the market interest rate is (a) 5%. (b) 6%. (c) 7%. (f e of Laudie issued $400,000 of 5%, 5-year bonds on January 1, 2017, Interest is payable semi-annually. E15-4 Calculate the price of the bond and prepare the journal entry to record the issuance of the bond assuming t market rate of interest is (a) 4%. (b) 5%. (c) 696. El 5-5 payable annually on January 1, 2018 Instructions Prepare the journal entries to record the following events: (a) the issuance of the bonds ns. Lombard Company issued S400,000 of 8%, 10-year bonds on lanuary 1, 2017, at face value. Intents (b) the accrual of interest on December 31, 2017, (e) the payment of interest on January 1, 2018 do Auming Lombard has a September 30 year end,prepare the adjusting journal entry needed on. 2017, and prepare the journal entry to record the interest payment on January 1, 2018, entries have not been used