Question: Sedona Systems issues bonds dated January 1, 2011, that pays interest semiannually on June 30 and December 31. The bonds have a $45,000 par value

Sedona Systems issues bonds dated January 1, 2011, that pays interest semiannually on June 30 and December 31. The bonds have a $45,000 and an annual contract rate of 12%, and they mature in five years.

Required
For each of the following three separate situations,
(a) Determine the bonds’ issue price on January 1, 2011, and
(b) Prepare the journal entry to record their issuance.
1. The market rate at the date of issuance is 10%.
2. The market rate at the date of issuance is 12%.
3. The market rate at the date of issuance is 14%.

Step by Step Solution

★★★★★

3.39 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Part 1 a Cash Flow Table Table Value Amount Present Value Par value B1 06139 45000 27626 Interest an... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

202-B-A-L (2430).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Fortune Systems issues bonds dated January 1, 2011, that pays interest semiannually on June 30 and December 31. The bonds have a $35,000 par value, an annual contract rate of 4%, and mature in four...

Harvard Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $45,000 par value, an annual contract rate of 6%, and mature in 6...

Prepare the journal entry to record Channel One Companys issuance of 100,000 shares of $0.50 par value common stock assuming the shares sell for: a. $0.50 cash per share. b. $2 cash per share.

Montana Company signs a five-year capital lease with Elway Company for office equipment. The annual lease payment is $20,000, and the interest rate is 8%. Required 1. Compute the present value of...

Sedona Systems issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $45,000 par value and an annual contract rate of 12%, and they mature in...

Round dollar amount to the nearest whole dollar, Assume no reversing entries are used. Sedona Systems issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31....

Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $40,000 par value and an annual contract rate of 10%, and they mature...

Problem 14-1A Computing bond price and recording issuance L.O. P1, P2, P3 Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds...

Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $20, 000 par value and an annual contract rate of 10%, and they mature...

Eagle Manufacturing supplies engine parts to Cherokee Cycle Company, a major U.S manufacturer of motorcycles. Like all of Cherokees suppliers, Eagle has always added a healthy profit margin to its...

Gonzalez Corporation has used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because...

QUESTION ANSWER Which seatement is cortect Reganding prinary and scoondicy humoral responses? The secondary response inockes froblatory Toclin that wind down the primary reaponese by that domirunt...

In the Meteor case study, Sarah has put together a comprehensive HRP. Think about what could go wrong or what difficulties could be faced and work out how you could deal with these problems.

Refer to the information in Problem and assume the periodic inventory system is used. In Problem Ming Company uses a perpetual inventory system. It entered into the following purchases and sales...

Refer to the information in Problem and assume the periodic inventory system is used. In Problem Aloha Company uses a perpetual inventory system. It entered into the following calendar-year 2015...

please dont use chat gpt 1 7 4 .

Question 13 (1 point} Ms. Woods asked her Grade 1 students what their hair colour was. Which of the following applv to Mr. Woods' question: 0 a. Qualitative, Ordinal O h. Quantitative, Interval O c....

Question 7 A company enters into a short futures contract to sell 50,000 units of a commodity for 70 cents per unit. The initial margin is $4,000 and the maintenance margin is $3,000. What is the...