On January 1, Hemi Corporation issued $350,000 of 9-year, 8% bonds for $309,086 yielding an effective interest
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Question:
On January 1, Hemi Corporation issued $350,000 of 9-year, 8% bonds for $309,086 yielding an effective interest rate (yield to maturity) of 10%. Interest is paid-semi-annually on June 30 and December 31.
Required:
1) Show computations to confirm the issue price
2) compute an amortization schedule for the 9 years of the bonds' life.
3) Give journal entries for: (A) bond issuance, (B) the semi-annual interest payment on June 30 of the first year, and (c) the semi0annual interest payment on December 31 of the first year.
Expert Answer:
Computation to confirm the issue price The issue price is calculated by discounting the future cash ... View the full answer
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