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

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).

Step by Step Solution

★★★★★

3.52 Rating (172 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 Price of the bonds at January 1 2011 Interest 4000000 x 1146992 45879680 Principal 80000000 x 0311... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

254-B-A-N-I (95).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

On January 1, a company issues bonds dated January 1 with a par value of $340,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31....

Prepare the journal entry to record Channel One Companys issuance of 100,000 shares of $0.50 par value common stock assuming the shares sell for: a. $0.50 cash per share. b. $2 cash per share.

Nueve Ltd. had the following pre-tax earnings and losses: Year Pre-tax Earnings (Loss) Tax rate 20x3 $330,000 34% 20x4 $165,000 34% 20x5 $540,000 34% 20x6 $660,000 36% 20x7 ($3,330,000) 36% 20x8...

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2018, The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity,...

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity,...

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity,...

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2024. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity,...

The Bradford Company issued 1 0 % bonds, dated January 1 , with a face amount of $ 8 0 million on January 1 , 2 0 2 4 .

00 The Bradford Company issued 10% bonds, dated January 1, with a face amount of $100 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and...

Exercise 14-3 (Algo) Determine the price of bonds; issuance; effective interest (LO14-2] The Bradford Company issued 10% bonds, dated January 1, with a face amount of $91 million on January 1, 2021....

An entrepreneur ventures on a trending business involving PPE (personal protective equipment) production. He can allot Php 81460 for monthly costs. Fixed costs are Php 59141 per month and variable...

Choose a publicly traded company (use Yahoo Financial to find the financial statements), discuss the profitability and liquidity of the company. For the liquidity, calculate the working capital and...

5 points ) : Why are condominium prices falling in Florida?

At December 31, 2018, Hull-Meyers Corp. had the following investments that were purchased during 2018, its first year of operations: No investments were sold during 2018. All securities except...

At December 31, 2013, Hull-Meyers Corp. had the following investments that were purchased during 2013, its first year of operations: No investments were sold during 2013. All securities except...

Keshara has the following net 1231 results for each of the years shown. What would be the nature of the net gains in 2013 and 2014? Tax Year _______Net 1231 Loss __________Net 1231 Gain 2009...

For 2016, Ashley has gross income of $8,350 and a $5,000 long-term capital loss. She claims the standard deduction. Ashley is 35 years old and unmarried with two dependent children. How much of...

a. Prepare a cross tabulation of the data on Industry (rows) and Brand Revenue ($ billions). Use class intervals of 25 starting at 0 for Brand Revenue ($ billions). b. Prepare a frequency...

Suppose there are two independent economic factors, M1 and M2. The risk-free rate is 5%, and all stocks have independent firm-specific components with a standard deviation of 40%. Portfolios A and B...

Prepare the necessary adjusting entries at December 31, 2021, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no...

The unadjusted trial balance as of December 31, 2021, for the Bagley Consulting Company appears below. December 31 is the company?s reporting year-end. Required: 1. Enter the account balances in...

Target Corporation prepares its financial statements according to U.S. GAAP. Targets financial statements and disclosure notes for the year ended February 3, 2018, are available in Connect. This...

Questions: What type of sampling technique is used in each example? Convenient sampling Stratified random sampling Cluster random sampling Systematic random sampling 1_ A student council surveys 60...

934 Question Help instructor-created question The pass completion percentages of 10 college football quarterbacks for their freshman and sophomore seasons are shown in the table below. At a = 0.05,...

Assume that blood pressure readings are normally distributed with a mean of 125 and a standard deviation of 9.6. If 144 people are randomlyselected, find the probability that their mean blood...