When Patey Pontoons issued $6\%$ bonds on January $1,2024,$ with a face amount of $$600,000,$ the market yield for bonds of similar risk and maturity was $7\%.$ The bonds mature December $31,2027(4$ years$).$ Interest is paid semiannually on June $30$ and December $31.$

Required:

Determine the price of the bonds at January $1,2024.$

Prepare the journal entry to record their issuance by Patey on January $1,2024.$

Prepare an amortization schedule that determines interest at the effective rate each period.

Prepare the journal entry to record interest on June $30,2024.$

What is the amount related to the bonds that Patey will report in its balance sheet at December $31,2024?$

What is the amount related to the bonds that Patey will report in its income statement for the year ended December $31,2024?($Ignore income taxes.$)$

Prepare the appropriate journal entries at maturity on December $31,2027.$

Answer rating: 100% (QA)

1 Determine the price of the bonds at January 1 2024 The bond price can be calculated using the pres... View the full answer