Consider your answers from Requirements 13 of Exercise. Journalize issuance of the bond and the first semiannual
Question:
Consider your answers from Requirements 1–3 of Exercise. Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions in Exercise. The company amortizes bond premium and discount by the effective- interest amortization method. Explanations are not required.
Requirement
1. Determine the present value of seven-year bonds payable with face value of $ 91,000 and stated interest rate of 14%, paid semiannually. The market rate of interest is 14% at issuance.
2. Same bonds payable as in Requirement 1, but the market interest rate is 16%.
3. Same bonds payable as in Requirement 1, but the market interest rate is 12%.
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
Step by Step Answer:
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura