Par Value of Bonds Purchased 800,000$ Stated Interest Rate 5.00% 2.50% Effective Interest Rate 4.00% 2.00% Purchased On 1/1/20X2 Interest Paid Semi-Annual Interest for 1/1 - 6/30 paid on July 1st of current year Interest for 7/1 - 12/31 paid on January 1st of next year Years to maturity 5 10 1.) Compute the value of the bond at acquisition. 2.) Compute the amount of cash to be received at each interest payment date. 3.) Compute the amount of interest revenue at the first interest payment date. Page 1 of 3 5.) What is the carrying value of the bond at the balance sheet date 12/31/X2? CONSIDER THESE ADDITIONAL FACTS: Bonds Called on 10/1/X6 Call % 103% 6.) Compute the proceeds on the call of the bond. 7.) Compute the carrying value of the bond at the call date. 8.) Compute the gain or loss on the call of the bonds. 4.) Consider the journal entry required at the first interest payment date. What impact does the journal entry have on the Held to Maturity Investment carrying value? Page 2 of 3 9.) Consider the journal entry required to record the call of the bond. What impact does the journal entry have on net income? 10.) Consider the journal entry required to record the call of the bond. What impact does the journal entry have on stockholder's equity?