On January 1, Modine Company issued $300,000 par value, 8%, 5-year bonds (i.e., there were 300...

  

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On January 1, Modine Company issued $300,000 par value, 8%, 5-year bonds (i.e., there were 300 of $1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1. Modine paid $4,000 in underwriting fees. Determine the issue price of the bonds with a 12% market rate of interest and prepare the journal entry to record the bond issue. Determine the issue price of the bonds. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.) The issue price of the bonds = On January 1, Modine Company issued $300,000 par value, 8%, 5-year bonds (i.e., there were 300 of $1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1. Modine paid $4,000 in underwriting fees. Determine the issue price of the bonds with a 12% market rate of interest and prepare the journal entry to record the bond issue. Determine the issue price of the bonds. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.) The issue price of the bonds =

Answer rating: 100% (QA)

Answer Issue Price of the Bonds Since the market interest rate 12 is higher than the coupon rate 8 the bond will be issued at a discount We need to fi... View the full answer