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Question 2 (30 marks) On April 30, Year 6, Tuesday Ltd. issued $1,000,000 of 20-year bonds paying interest twice a year on October 31
Question 2 (30 marks) On April 30, Year 6, Tuesday Ltd. issued $1,000,000 of 20-year bonds paying interest twice a year on October 31 and April 30. The coupon rate is 5%, and the market rate was 7%. The bonds were issued at 78.6449. Required a. Calculate the issue price. Round your numbers to the nearest dollar. b. Prepare a bond amortization table for the initial issue of the bonds and the first four interest periods. c. Using the net method, prepare journal entries for the issue of the bonds and the following: Interest payment on October 31, Year 6 Interest accrual, rounded to 2 months, on December 31, Year 6 Interest payment on April 30, Year 7 Interest payment on October 31, Year 7 Interest accrual on December 31, Year 7
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