Federal Semiconductors issued 1 1 % bonds, dated January 1 , with a face amount of $
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Question:
Federal Semiconductors issued bonds, dated January with a face amount of $ million on January
The bonds sold for $ and mature on December years
For bonds of similar risk and maturity the market yield was
Interest is paid semiannually on June and December
Federal determines interest at the effective rate.
Federal elected the option to report these bonds at their fair value.
On December the fair value of the bonds was $ million as determined by their market value in the overthecounter market.
Assume the fair value of the bonds on December had risen to $ million.
Required:
Complete the below table to record the following journal entries.
& Prepare the journal entries to record interest on June December and adjust the bonds to their fair value for presentation in the December balance sheet, and record interest on June December and adjust the bonds to their f to a decline in general interest rates.
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