When Patey Pontoons issued 6% bonds on January 1, 2021, with a face amount of $840,000, the market yield for bonds of similar risk and maturity was 11%. The bonds mature December 31, 2024 (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.) 1.5 points Required: 1. Determine the price of the bonds at January 1, 2021. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2021. 3. Prepare an amortization schedule that determines interest at the effective rate each period. eBook 4. Prepare the journal entry to record interest on June 30, 2021. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2021? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2021? (Ignore income taxes.) Print 7. Prepare the appropriate journal entries at maturity on December 31, 2024. References Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 and 6 Req 7 Determine the price of the bonds at January 1, 2021. (Round final answers to the nearest whole dollar.) Table values are based on: n = i= % Cash Flow Amount Present Value Interest Principal Price of bonds 2 National Orthopedics Co. issued 8% bonds, dated January 1, with a face amount of $650,000 on January 1, 2021. The bonds mature on December 31, 2024 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, EVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables 1.5 provided.) points Required: 1. Determine the price of the bonds at January 1, 2021. 2. Prepare the journal entry to record their issuance by National on January 1, 2021. eBook 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2021. 5. Prepare the appropriate journal entries at maturity on December 31, 2024. Hint Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Required 3 Required 4 Required 5 References Determine the price of the bonds at January 1, 2021. (Round final answers to the nearest whole dollar.) Table values are based on: n= i= Cash Flow Amount Present Value Interest Principal Price of bonds 3 Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $700,000, three-year note that specified 6% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by 1.5 comparison with similar transactions that 10% was a reasonable rate of interest. (FV of $1, PV of $1, EVA of $1, PVA of $1, FVAD of $1 points and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Complete the table below to determine the price of the equipment. eBook 1-b. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Hint Complete this question by entering your answers in the tabs below. Print Req 1A Req 1B Req 2 Req 3 References Complete the table below to determine the price of the equipment. (Round final answers to the nearest whole dollar.) Table values are based on: n= i= Cash Flow Amount Present Value Interest Principal Price of equipment
