On June 30, 2018, the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year

Question:

On June 30, 2018, the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond premium using the effective-interest method.

Requirements

1. Use the PV function in Excel to calculate the issue price of the bonds.

2. Prepare a bond amortization table for the term of the bonds using Excel.

3. Record the issuance of bonds payable on June 30, 2018; the payment of interest on December 31, 2018; and the payment of interest on June 30, 2019.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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