ACCT-UB 1 Lecture Notes - Lecture 11: Effective Interest Rate
Document Summary
Get access
Related Documents
Related Questions
Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
What is the amount of each semiannual interest payment for these bonds?
How many semiannual interest payments will be made on these bonds over their life?
Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium.
|
Compute the price of the bonds as of their issue date.
|
Prepare the journal entry to record the bondsâ issuance.
1- Record the issue of bonds with a par value of $800,000 for cash.