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Please help me solve! Problem 1: On January 1, 2013, Queen Corporation issued 12-year, 6% bonds payable with a face value of $10 million. The
Please help me solve!
Problem 1: On January 1, 2013, Queen Corporation issued 12-year, 6% bonds payable with a face value of $10 million. The bonds require semi-annual coupon payments on June 30 and December 31 every year. 1) Fill in the blanks below to show the amounts and timing for contractual future cash flows for these bonds. a) Lump-sum payment due at maturity (FV)= b) Amount of each semi-annual coupon payment (pmt) = c) Number of compounding periods from issue date to maturity d) Total cash outflows required by these bonds = 2) For this question, fill in the blanks below with the value of Queen's bonds on 1/1/13. The value represents the cash proceeds that Queen would receive when issuing these bonds. a) (Annual) Market interest rate = 5% $ b) (Annual) Market interest rate = 8.3% $ c) Quoted market price = 92 $ 3) For this question, assume that Queen issued these bonds on 1/1/13 in exchange for cash of $8,899,162. For the journal entries, you may choose to use a companion account or not. a) Did Queen issue these bonds at par, premium, or discount? b) What was the market interest rate PER PERIOD on 1/1/13? c) Prepare Queen's journal entry to recognize the issuance of these bonds on 1/1/13. d) Prepare Queen's journal entry to recognize the coupon payment on 6/30/13. e) Explain in words how you calculated the interest expense amount in your 6/30/13 journal entryStep by Step Solution
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