Question: On January 1 a company purchased 3 20 year corporate bonds
On January 1, a company purchased 3%, 20-year corporate bonds for $69,033,776 as an investment. The bonds have a face amount of $80 million and are priced to yield 4%. Interest is paid semiannually. Prepare the journal entry to record revenue at the effective interest rate on December 31, the second interest payment date.
Answer to relevant QuestionsSnipes Construction paid for earth-moving equipment by issuing a $300,000, 3-year note that specified 2% interest to be paid on December 31 of each year. The equipment's retail cash price was unknown, but it was determined ...AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2011. The bonds sold for $150 million. For bonds of similar risk and maturity the market yield was 9%. Upon issuance, AI elected the option to ...Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on January 1, 2011. The bonds mature on December 31, 2025 (15 years). The market rate of interest for similar issues was 12%. Interest is ...At the end of 2010, Majors Furniture Company failed to accrue $61,000 of interest expense that accrued during the last five months of 2010 on bonds payable. The bonds mature in 2024. The discount on the bonds is amortized by ...On January 1, 2011, Madison Products issued $40 million of 6%, 10-year convertible bonds at a net price of $40.8 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The ...
Post your question