The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on
Question:
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2011. The bonds mature in 2020 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2011.
2. Prepare the journal entry to record their issuance by The Bradford Company on January 1, 2011.
3. Prepare the journal entry to record interest on June 30, 2011 (at the effective rate).
4. Prepare the journal entry to record interest on December 31, 2011 (at the effective rate).
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Step by Step Answer:
1 Price of the bonds at January 1 2011 Interest 4000000 x 1146992 45879680 Principal 80000000 x 0311...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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