Haulem Equipment Inc issued 75 million 20 year bonds to finance
Haulem Equipment Inc. issued $75 million 20-year bonds to finance the expansion of its school bus manufacturing operations in Winnipeg, Manitoba. The bonds pay 6% interest semi-annually and were issued at 89.322 to yield 7%.
Required:
a. Calculate the amount of cash Haulem received on issuance of the bonds and prepare the related journal entry.
b. Prepare the journal entries to record the first two interest payments.
c. Calculate the carrying value of the bonds one year after issuance (that is, after the second semi-annual payment).
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