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On July 2, 2018, Imperial Inc. purchased $470,000 of Acme Corp. 5% bonds at a price to yield a market interest rate of 6%. The

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On July 2, 2018, Imperial Inc. purchased $470,000 of Acme Corp. 5% bonds at a price to yield a market interest rate of 6%. The bonds pay interest semi- annually on July 1 and January 1, and mature on July 1, 2028. Imperial plans to hold this investment until it matures. At December 31, 2018, which is the year end for both companies, the bonds were trading at 94 (this means 94% of maturity value) Part 1 Calculate the present value (issue price) of the bonds on July 2, 2018. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places, eg. 5,250.) Present Value of the Bonds $ e Textbook and Media Part 2 For Imperial, the investor, record. (Credit account titles are automatically indented when the amount is entered. Do not indent manually Round answers to decimal places, e.. 5.250. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) 1. the purchase of the bonds on July 2, 2018, 2the accrual of interest on December 31, 2018, 3. the receipt of interest on January 1, 2019, and 4. the receipt of interest on July 1, 2019. Date Account Titles and Explanation Debit Credit 2018 July 2 Dec. 31 2019 Jan. 1 Dec. 31 2019 Jan. 1 July 1 Part 3 For Acme, the investee (issuer), record. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to decimal places, e.g. 5,250. If no entry is required, select "No Entry for the account titles and enter for the amounts.) 1. the issue of the bonds on July 2, 2018, 2. the accrual of interest on December 31, 2018, 3. the payment of interest on January 1, 2019, and 4. the payment of interest on July 1, 2019. Debit Credit Account Titles and Explanation Date 2018 July 2 Dec. 31 2019 Jan. 1 2019 Jan. 1 July 1

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