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On January 1, 2019, the a company issued $20,000 in bonds. The bonds mature in 3 years and pay interest every December 31. CAUTION: The
On January 1, 2019, the a company issued $20,000 in bonds. The bonds mature in 3 years and pay interest every December 31. CAUTION: The company closes books on September 30 of each year. Due to a violent nervous breakdown, the company's controller, left the following amortization table unfinished (assume that the portion shown is correct):
Date
(1) 1/1/19
(2) 12/31/19
(3) 12/31/20
(4) 12/31/21
Cash Paid
(1)
(2) $ 2,000
(3)
(4)
Interest Expenses
(1)
(2)
(3)
(4)
Amortization
(1)
(2) $ 284
(3)
(4)
Balance Obligation
(1) $ 19,040
(2)
(3)
(4)
Required:
1. What is the nominal interest rate? (It is mandatory to present your computation to receive credit for your answer)
2. What is the interest rate in the market? (It is mandatory to present your computation to receive credit for your answer)
3. Complete the table that Pryor left unfinished. Post journal entries for Razn on the following dates: January 1, 2019; Sep 30, 2019; December 31, 2019
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