On January 1, 2011, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated

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On January 1, 2011, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2030 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually.

Required:
1. Determine the price of the bonds at January 1, 2011, and prepare the journal entry to record their issuance by Instaform.
2. Assume the market rate was 9%. Determine the price of the bonds at January 1, 2011, and prepare the journal entry to record their issuance by Instaform.
3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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