Describe the accounts in the JE , under Scenario A SOCIAL IMPACT LEARNING wants to issue $
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Describe the accounts in the JE under Scenario A
SOCIAL IMPACT LEARNING wants to issue $ of bonds payable that matures in five years, semiannual interest on July and Jan of each year. The company issues these bonds on January
The market rate for similar investments is
Scenario A: under this scenario issue at Face; CR MR
Scenario A Face
Dr Cash Proceeds Face Amount
Cr Bonds Payable BP Face Amount
at Face Value or Par: Contract Rate CR the rate on the Face of the bonds Market Rate MR
Both the CR and the MR are the same, which means that investor will receive a return on the bonds equal to the CR No need to change the issue price to effectively reduce or increase the CR to match the MR since they are both equal. The JE will be as follows:
Pricing Bonds
Scenario A Face
Dr Cash Proceeds Face Amount
Cr Bonds Payable BP
Related Book For
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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