Question
Please do not show work and answers handwritten, I can not understand it sometimes. Thank you! When Patey Pontoons issued 10% bonds on January 1,
Please do not show work and answers handwritten, I can not understand it sometimes. Thank you!
When Patey Pontoons issued 10% bonds on January 1, 2016, with a face amount of $800,000, the market yield for bonds of similar risk and maturity was 11%. The bonds mature December 31, 2019 (4 years). Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
-Determine the price of the bonds at January 1, 2016.
-Prepare the journal entry to record their issuance by Patey on January 1, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
-Prepare an amortization schedule that determines interest at the effective rate each period.
-Prepare the journal entry to record interest on June 30, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
-What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31, 2016?
-What is the amount(s) related to the bonds that Patey will report in its income statement for the year ended December 31, 2016? (Ignore income taxes.)
-Prepare the appropriate journal entries at maturity on December 31,(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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