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28 Sep 2019
Hartford Research issues bonds dated January 1, 2015, that payinterest semiannually on June 30 and December 31. The bonds have a$31,000 par value and an annual contract rate of 12%, and theymature in 10 years. (Table B.1, Table B.2, Table B.3, and TableB.4) (Use appropriate factor(s) from the tables provided.Round all table values to 4 decimal places, and use the roundedtable values in calculations.)
Required: Consider each of the followingthree separate situations.
1. The market rate at the date ofissuance is 10%.
(a) Complete the below table to determine the bonds' issue price onJanuary 1, 2015.
Tablevalues are based on: n = i = CashFlow Table Value Amount Present Value Par(maturity) value Interest(annuity) Price of bonds
(b) Prepare the journal entry to record their issuance.
Journal Entry Worksheet
Record the issue of bonds with a par value of $31,000 cash onJanuary 1, 2015. Assume that the market rate of interest at thedate of issue is 10%.
Date General Journal Debit Credit
Jan 01, 2015 Cash Premium onbonds payable Bondspayable
*Enter debits before credits
Hartford Research issues bonds dated January 1, 2015, that payinterest semiannually on June 30 and December 31. The bonds have a$31,000 par value and an annual contract rate of 12%, and theymature in 10 years. (Table B.1, Table B.2, Table B.3, and TableB.4) (Use appropriate factor(s) from the tables provided.Round all table values to 4 decimal places, and use the roundedtable values in calculations.) |
Required: |
Consider each of the followingthree separate situations. |
1. | The market rate at the date ofissuance is 10%. |
(a) | Complete the below table to determine the bonds' issue price onJanuary 1, 2015.
|
Hubert KochLv2
28 Sep 2019