Question
Samosa, Inc issues corporate bonds with the following information. Samosa, Inc Bond Issuance Description Data Par Value 100,000 Term 3 years Contract Interest Rate 2%
Samosa, Inc issues corporate bonds with the following information.
| Description | Data |
|---|---|
| Par Value | 100,000 |
| Term | 3 years |
| Contract Interest Rate | 2% |
| Market Interest Rate | 2% |
| Issue Price | 100 |
Is this bond issued at par value, at a discount, or at a premium?
This bond pays interest semi-annually. How many total interest payments will be made?
What is the amount of each semi-annual interest payment?
How much cash will Samosa receive when one bond is issued?
If there is a discount or premium, how much is it?
If there is a discount or premium, how much will be amortized with each interest payment?
How much interest expense will be recorded each time a semi-annual interest payment is made?
Prepare the journal entry to record the issuance of one bond.
DR:
CR:
Prepare the journal entry to record the semi annual interest payment on one bond.
DR:
CR:
Prepare the journal entry to retire the bond.
DR:
CR:
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