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On 1 July 20X8, Sun Company purchased $5,100,000 of Moon Corp. 8.2% bonds, classified as an AC investment. The bonds pay semi-annual interest each 30
On 1 July 20X8, Sun Company purchased $5,100,000 of Moon Corp. 8.2% bonds, classified as an AC investment. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 8% on the date of purchase. The bonds mature on 30 June 20X13. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the price paid by Sun Company. (Round time value factor to 5 decimal places. Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) 2. Construct a table that shows interest revenue reported by Sun, and the carrying value of the investment, for each interest period for four interest periods. Use the effective-interest method. (Round your answers to the nearest whole dollar amount.) 3. Prepare the entries for the first two interest periods based on your calculations in requirement 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) 4-a. How much interest revenue would be reported for the year ended 31 December 20X9? (Round your answer to the nearest whole dollar amount.) 4-b. What would the balance of the investment account for the year ended 31 December 20X9? (Round your answer to the nearest whole dollar amount.)
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