James Corporation is planning to issue $517,000 worth of bonds that mature in 4 years and pay 8 percent interest each June 30 and December 31. All of the bonds will be sold on January 1, 2014.

Compute the issue (sale) price on January 1, 2014, for each of the following independent cases

a.	Case A: Market (yield) rate, 6 percent.

b.

Case B: Market (yield) rate, 8 percent

c.

Case C: Market (yield) rate, 10 percent

2) On January 1, 2014, Park Corporation sold a $619,000, 10 percent bond issue (12 percent market rate). The bonds were dated January 1, 2014, pay interest each June 30 and December 31, and mature in ten years.

a) Prepare the journal entry to record the issuance of the bonds.

b) Prepare the journal entry to record the interest payment on June 30, 2014. Use effective-interest amortization

c) Show how the bond interest expense and the bonds payable should be reported on the June 30, 2014, income statement and balance sheet

5) On January 1, 2014, Frog Corporation sold a $2,150,000, 10 percent bond issue (10 percent market rate). The bonds were dated January 1, 2014, pay interest each June 30 and December 31, and mature in 5 years.

a)Prepare the journal entry to record the issuance of the bonds.

b) Prepare the journal entry to record the interest payment on June 30, 2014. Use effective-interest amortization.

c) Show how the bonds payable should be reported on the June 30, 2014, financial statements.

Balance sheet and income statement

MBTA Corporation issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1, 2014. The stated interest rate was payable at the end of each year. The bonds mature at the end of four years. The following schedule has been completed (amounts in thousands):

6)

Date	Cash		Interest		Amortization				Balance
January 1, 2014										$	49,028
End of Year 2014	$	3,660	$	3,426		$	234				48,794
End of Year 2015		3,660		?			?				48,550
End of Year 2016		3,660		?			?				?
End of Year 2017		3,660		?			?				48,000

a) Complete the amortization schedule above b) What was the maturity amount of the bonds? c)How much cash was received at the date of issuance (sale) of the bonds?