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hart of Accounts Journal Final Questions X Instructions On July 1, Year 1, Danzer Industries Inc. issued $35,400,000 of 10-year, 10% bonds at a market
hart of Accounts
Journal
Final Questions
X
Instructions
On July 1, Year 1, Danzer Industries Inc. issued $35,400,000 of 10-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $31,339,478. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. | Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* | ||||
2. | Journalize the entries to record the following:*
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3. | Determine the total interest expense for Year 1. | ||||
4. | Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? | ||||
5. | Compute the price of $31,339,478 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) |
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