Question
Frank Suit Ltd. designs and manufactures anti-gravity suits used by air force pilots and astronauts for space travel. To finance the expansion of its manufacturing
Frank Suit Ltd. designs and manufactures anti-gravity suits used by air force pilots and astronauts for space travel. To finance the expansion of its manufacturing operations, the company, in consultation with an investment bank, decided to issue bonds. On August 1, it issued 10-year, semi-annual bonds with a face value of $140,000,000. The contract rate on the bonds was 11% and the proceeds on the issuance of the bonds were $129,682,000 to yield 12.3%. Interest payments are to be made each January 31 and July 31.
Determine the price of the bonds on issuance.
Proceeds on Issuance of the Bonds | $ |
2. Prepare the journal entry to record the bonds sale on August 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation | Debit | Credit |
3.Provide the journal entries to record the first two interest payments. Ignore year-end accruals of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
Account Titles and Explanation | Debit | Credit |
(Interest entry for the first interest payment) | ||
(Interest entry for the second interest payment) |
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