Pearce Corporation issued $580,000 of 6%, 10-year bonds payable on March 31, 2019. The market interest rate
Question:
Pearce Corporation issued $580,000 of 6%, 10-year bonds payable on March 31, 2019. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Pearce Corporation’s year-end is March 31.
1. Using the PV function in Excel, calculate the issue price of the bonds.
2. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar.
3. Record Pearce Corporation’s issuance of the bonds on March 31, 2019, and payment of the first semiannual interest amount and amortization of the bond discount on September 30, 2019. Explanations are not required.
CorporationA 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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Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.