When Patey Pontoons issued 8% bonds on January 1, 2018, with a face amount of $700,000, the market yield for bonds of similar risk and maturity was 9%. The bonds mature December 31, 2021 (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 $i) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds at January 1, 2018. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2018. 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, 2018. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2018? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2018? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2021. Complete this question by entering your answers in the tabs below. Reg 1 Req2 Reg 3 Reg 4 Req 5 and 6 Reg 7 Determine the price of the bonds at January 1, 2018. (Round final answers to the nearest whole dollar.) Table values are based on: n = Cash Flow Amount Present Value Interest Principal Price of bonds Reg 1 Reg 2 Reg 3 Reg 4 Req 5 and 6 Reg 7 Prepare the journal entry to record their issuance by Patey on January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollar.) View transaction list Journal entry worksheet Req 1 Reg 2 Reg 3 Reg 4 Reg 5 and 6 Reg 7 Prepare the journal entry to record interest on June 30, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 Record the interest expense on June 30, 2018. Note: Enter debits before credits General Journal Debit Credit Date June 30, 2018 No journal entry required Accounts payable Accounts receivable Accumulated depreciation Record entry View general journal Required: 1. Determine the price of the bonds at January 1, 2018. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2018. 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, 2018. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2018? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2018? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2021. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Reg 4 Reg 5 and 6 Req 7 What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31, 2018 and income statement for the year ended December 31, 2018? (Ignore income taxes.) (Round your intermediate calculation to nearest whole dollar.) 5. December 31, 2018 book value 6. Interest expense for 2018
