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Instructions On January 1, 2016, Whitefeather Industries issued 400, $1,000 face value bonds. The bonds have a five-year life and pay interest at the
Instructions On January 1, 2016, Whitefeather Industries issued 400, $1,000 face value bonds. The bonds have a five-year life and pay interest at the rate of 8%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 was 8%. Required: 1. Calculate the issue price of the bonds and record the issuance of the bonds on January 1, 2016. 2. Explain how the issue price would have been affected if the market rate of interest had been higher than 8%. 3. Prepare the journal entry to record the payment of interest on July 1, 2016. 4. Calculate the amount of interest accrued on December 31, 2016. First Question 1a. Calculate the issue price of the bonds on January 1, 2016. Issue price 2. How would the issue price have been affected if the market rate of interest had been higher than 8%. Indeterminable without more information.
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