On January 1, 2021, Urbana Corporation issued $400,000 of its 20-year, 12% bonds, when the effective...

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On January 1, 2021, Urbana Corporation issued $400,000 of its 20-year, 12% bonds, when the effective market rate (yield) for bonds of similar risk and maturity was 10%.. Interest is payable semiannually on June 30 and December 31. Urbana Corporation records interest at the effective rate and elected the option to report these bonds at their fair value. At the end of 2021, the fair value of the bonds issued by Urbana Corporation was determined to be $500,000. The change in fair value was because of a change in the general (risk-free) rate of interest. At the end of 2022, the fair value of the bonds issued by Urbana Corporation was determined to be $400,000. The change in fair value was NOT because of a change in the general (risk-free) rate of interest, but rather a change in Urbana Corporation's credit risk. FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 PVAD of $1 (tables provided for convenience) Required: 1a. Calculate the bond price at issuance, 1b. Prepare the journal entry to record the bond issuance. 2, 3 & 4. Prepare the journal entry to record interest on the first interest payment date, then prepare the journal entry to record interest on the second interest payment date. and also prepare the journal entry to adjust the bonds to their fair value for presentation in the balance sheet as of December 31, 2021. 5, 6 & 7. Prepare the journal entry to record interest on the third interest payment date, then prepare the journal entry to record interest on the fourth interest payment date. and also prepare the journal entry to adjust the bonds to their fair value for presentation in the balance sheet as of December 31, 2022. On January 1, 2021, Urbana Corporation issued $400,000 of its 20-year, 12% bonds, when the effective market rate (yield) for bonds of similar risk and maturity was 10%.. Interest is payable semiannually on June 30 and December 31. Urbana Corporation records interest at the effective rate and elected the option to report these bonds at their fair value. At the end of 2021, the fair value of the bonds issued by Urbana Corporation was determined to be $500,000. The change in fair value was because of a change in the general (risk-free) rate of interest. At the end of 2022, the fair value of the bonds issued by Urbana Corporation was determined to be $400,000. The change in fair value was NOT because of a change in the general (risk-free) rate of interest, but rather a change in Urbana Corporation's credit risk. FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 PVAD of $1 (tables provided for convenience) Required: 1a. Calculate the bond price at issuance, 1b. Prepare the journal entry to record the bond issuance. 2, 3 & 4. Prepare the journal entry to record interest on the first interest payment date, then prepare the journal entry to record interest on the second interest payment date. and also prepare the journal entry to adjust the bonds to their fair value for presentation in the balance sheet as of December 31, 2021. 5, 6 & 7. Prepare the journal entry to record interest on the third interest payment date, then prepare the journal entry to record interest on the fourth interest payment date. and also prepare the journal entry to adjust the bonds to their fair value for presentation in the balance sheet as of December 31, 2022.