Suppose a company issues bonds with a par value of $300,000, a life of five years, and
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Suppose a company issues bonds with a par value of $300,000, a life of five years, and a nominal annual rate of 6.50%. The market rate for these bonds is 3.8 per annum. The bonds pay interest every six months.
a. Determine the selling price of these bonds and make a journal entry to record their issue.
b. Make the journal entry to record the interest payment in the third semi-annual period.
C. Suppose that on the same day that semiannual payment number six was made, the company called the bonds, paying 104 as the call price. Did you recognize a gain or loss on the transaction? If yes, state how much the gain or loss was.
Related Book For
Financial Accounting Information For Decisions
ISBN: 9781260705584
10th Edition
Authors: John J. Wild
Posted Date: