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P 10-7 (Appendices) On January 1, 2019, Pete's Planes Inc. was authorized to issue 5-year, $500,000, 12% bonds. Interest was payable on June 30 and
P 10-7 (Appendices) On January 1, 2019, Pete's Planes Inc. was authorized to issue 5-year, $500,000, 12% bonds. Interest was payable on June 30 and December 31. All the bonds were issued on January 1, 2019. Required: Answer the questions for each of these independent cases. Case A: the bonds were issued when the market rate of interest was 12%. Case B: the bonds were issued when the market rate of interest was 16% Case C: the bonds were issued when the market rate of interest was 8% 1. Calculate a. the amount of each semi-annual cash interest payment on the issued bonds; b. the issue price of the bonds, consisting of the present value of the bond face value and the present value of the 10 semi-annual interest payments to be made during the 5-year period (for convenience, round all calculations to the nearest dollar); c. the amount of amortization applicable to each interest payment date up to and including December 31, 2021; and d. the carrying amount of the bonds at December 31, 2021. 2. Prepare journal entries to record the 2021 transactions
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