Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me do these entries! Thank You Use the Bond Daily Activity as a reference when completting this project A company issues bonds with

image text in transcribedimage text in transcribedimage text in transcribed

Please help me do these entries!

Thank You

Use the Bond Daily Activity as a reference when completting this project A company issues bonds with a par value of $1,500,000 on their issue date of January 1, 2018. The bonds mature in ten years and pay 10% annual interest in two semiannual payments. You will need the information on Tables A3.8 and A3.10 in Appendix 3 of your textbook 1) On the issue date, the market rate of interest is 10% a) Compute the price of the bonds on their issue date. (Round to the nearest dollar) b) Prepare the general journal entry for the issuance of the bonds. c) Prepare the general journal entry for the first (July 1, 2018, using straight line amortization) payment. Present value of 1 due in periods at % Present value of an annuity for periods at % Bond issue price Amount 1,500,000 75,000 Factor 0.37689 12.46221 PV 565,335 934,665 1,500,000 | Debit Credit Date Account titles & Explanations 1/1/18 Cash Bonds payable 1500000 1500000 75000 7/1/18 Interest expense Cash 75000 2) On the issue date, the market rate of interest is 8% a) Compute the price of the bonds on their issue date. (Round to the nearest dollar) b) Prepare the general journal entry for the issuance of the bonds. c) Prepare the general journal entry for the first (July 1, 2018, using straight line amortization) payment. Present value of 1 due in periods at % Present value of an annuity for periods at Bond issue price % 3) On the issue date, the market rate of interest is 12% a) Compute the price of the bonds on their issue date. (Round to the nearest dollar) b) Prepare the general journal entry for the issuance of the bonds. c) Prepare the general journal entry for the first (July 1, 2018, using straight line amortization) payment. Present value of 1 due in periods at % Present value of an annuity for periods at Bond issue price %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions