On January 1, 2009, Cool Universe issued 10% bonds dated January 1, 2009, with a face amount
Question:
On January 1, 2009, Cool Universe issued 10% bonds dated January 1, 2009, with a face amount of $20 million. The bonds mature in 2018 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2009.
2. Prepare the journal entry to record their issuance by Cool on January 1, 2009.
3. Prepare the journal entry to record interest on June 30, 2009, using the straight-line method.
4. Prepare the journal entry to record interest on December 31, 2009, using the straight-line method.
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1 2 3 4 Interest 1000000 x 1146992 Principal 20000000 x 031180 Cas...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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