On Jan 1, 2020 Enfield Co. purchased a bond investment that pays 10% annual interest, paid...

 

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On Jan 1, 2020 Enfield Co. purchased a bond investment that pays 10% annual interest, paid semi-annually at the end of each interest period, June 30 and Dec 31. The bond has a face value of $3000, four years until maturity, and was purchased to yield an 8% annual return. Enfield uses IFRS and uses the amortized cost method. Required: a) Calculate the bond price paid (use any method but show the factors you used). b) Prepare all of the journal entries for the bond for Enfield for 2020. Show any calculations. On Jan 1, 2020 Enfield Co. purchased a bond investment that pays 10% annual interest, paid semi-annually at the end of each interest period, June 30 and Dec 31. The bond has a face value of $3000, four years until maturity, and was purchased to yield an 8% annual return. Enfield uses IFRS and uses the amortized cost method. Required: a) Calculate the bond price paid (use any method but show the factors you used). b) Prepare all of the journal entries for the bond for Enfield for 2020. Show any calculations.

Answer rating: 100% (QA)

a To calculate the bond price paid we can use the present value formula The bond pays semiannual int... View the full answer