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Not sure if I'm doing part A, B and C right. please help me 3. On January 1, 2014, Lowry Co. issued five-year bonds with
Not sure if I'm doing part A, B and C right. please help me
3. On January 1, 2014, Lowry Co. issued five-year bonds with a face value of $200,000 and a stated interest rate of 12%, payable semiannually on June 30 and December 31. The bonds were sold to yield 10%. The firm uses the effective interest method of amortizing discounts and premiums. Present Value of 1 for 5 periods at 10% .62092 Present Value of 1 for 5 periods at 12%.56743 Present Value of 1 for 10 periods at 5% .61391 200,000 Present Value of 1 for 10 periods at 6% 55839 X.12 stored Yes Present Value of an ordinary annuity of 1 for 5 periods at 10% 3.79079 24000 Present Value of an ordinary annuity of 1 for 5 periods at 12% 3.60478 Present Value of an ordinary annuity of 1 for 10 periods at 5% 7.72173 24000/2 ->semi Present Value of an ordinary annuity of 1 for 10 periods at 6% 7.36009 = 12,000 Instructions (200,000 X.61391) + (12,000x4.42143) A) Calculate the price of the bond. 122,782 2,661 F + 3200,000 t = 5.1 Sinted-12% 510 = $215,443 Yield-107./ 27 N S12 Semiannual B) Prepare the journal entry to record the issuance of the bonds. 215,443 Cash 215,443 200,000 15, 443 Cond paupble Premium on Bond paynble 200,000 15,443 C) Prepare the amortization table for 2014 and 2015 (b) can interest Interest Exp. Co Decount Pralized LD) crost Discount 15.443 16,671 (E ) COAT Aenait 215,443 10,442 1,228 1214, 215 Date /15 06/30/15 12/31/15 06/30/16/ 12/31/16 12,000 12,000 12,000 12,000 (C) A-b (0) 15,443 16) 215,443 ) 11,226) 200,000 X .12 24,000/2 = 12,000 (Constant) +1,276 (6) 215,443 x.05 10.472 16,671 XO333 $ 18,450Step by Step Solution
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