Question: 22 points Problem 3 (22 Marks) On January 1, 2020, Darden Company issued 85.000,000 face value of 11 s.year bonds which provides the bondholders with

bondholders with a market rate affective tomat ihnen The bonds pay semiannual

22 points Problem 3 (22 Marks) On January 1, 2020, Darden Company issued 85.000,000 face value of 11 s.year bonds which provides the bondholders with a market rate affective tomat ihnen The bonds pay semiannual interest on June 30 atal December 31. The following Prevent value tables are provided for you Present Value Interest Factors for One Dollar Discounted atk Pererat for a periode Periods 4,04 4.596 5.09 6.095 6,895 9.045 10,056 11.05 1 0.96154 0.956 0.95238 0.94787 0.94340 0.98897 093458 0.909090 2 0.92456 0,91573 0.90703 0.89845 0.89000 0.88166 0.87346 0.32645 0.81162 3 0.88900 0,876300.16384 0.85161 0,83962 0827850.81630 0.75131 073119 4 0.85480 0.83856 0.82270 0.807220.79209 0.77732 0.76290 0.68301 0.65873 The bonds pay semiannual interest on 31. The following Present value tables are provided for you: Present Value Interest Factors for One Dollar Discounted at k Percent for n Periods Periods 4.096 4.596 5,0% 5.5% 6.09 6.5% 7.0% 10.0% 11.0% 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 0.90909090090 2 0.92456 0.91573 0.90703 0.89843 0.89000 0.88166 0.87344 0.82645 0.81162 3 0.88900 0.87630 0.86384 0.85161 0.83962 0.82785 0.81610 0.75131 0.73119 4 0.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 0.68301 0.65873 5 0.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 0.62092 0.59345 6 0.79031 0.76790 0.74622 0.72525 0.70496 0.68533 0.66634 0.56447 0.53464 7 0.75992 0.73483 0.71068 0.68744 0.66506 0,64351 0.62275 0.51316 0.48166 8 0.73069 0.70319 0.67684 0.65160 0.62741 0.60423 0.58201 0.46651 0.43393 9 0.70259 0.67290 0.64461 0.61763 0.39190 0.56735 0.54393 0.42410 0.39092 10 0.67556 0.64393 0.61391 0.58543 0.55839 0.53273 0.50835 0.38354 0.35218 Present Value Interest Factors for a One Dollar Annuity Discounted at k Percent for a Periods 6.73274 6.59589 6.46321 6.3 75 5.97130 5.33493 5.14612 9 7.43333 7.26879 7.10782 6,9 10 6.51523 5.759025.53705 10 8.11090 7.91272 7.72173 7.5 383 7.02358 6.14457 5.88923 Instructions: a. Prepare the journal entry at the date of the bond issuance. Use the present value tables and round to the nearest dollar ( Marks) b. Prepare the journal entry for the payment of interest and the amortization of the premium on June 30, 2020. (5 Marks) c. Prepare the journal entry for the payment of interest and the amortization of the premium on December 31, 2020. (5 Marks) d. How would your answer differ if the effective-interest rate is 11%. (no calculations required) (6 Marks)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Problem 3:22 Marks) On January 1, 2020, Durden Company issued $5,000,000 face value of 11%, 5-year bonds which provides the bondholders with a 9% market rate (effective interest rate). The bends pay...

All views expressed in this paper are those of the authors and do not necessarily represent the views of the Hellenic Observatory or the LSE George Alogoskoufis Greeces Sovereign Debt Crisis:...

Please help! Need in the next 2 hours. For Accounting 503. Dashboard ACC 503 FA2016 V Week 11 Final Exam #3Submit for Grade Your password will expire on 12/14/2016 7:36:55 AM Fatjona Gjoka Please...

Assume that the following information is relevant for one of the bond issues of Joanna Inc.: Item Value Face Value $500,000 Bond Term 10 Years Stated Interest Rate (paid Semiannually) 12.00 % Market...

Please help!! Need in 1.5 hours. For Intermediate accounting. The sale of a fixed asset at a book value affects cash flows from investing activities under the direct and indirect methods...

I need help with the following case. Questions 4 and 5 specifically ISSUES IN ACCOUNTING EDUCATION Vol. 20, No. 2 May 2005 pp. 195-212 Reporting Earnings at Summer Technology A Capstone Case...

how is the deferred loss calculated on problem 38? other soloutions have a different number. ch08 Student: ___________________________________________________________________________ 1. Cutler...

I need my powerpoint draft edited to ensure all the requirement of the assignment are answered and clearly noted in this powerpoint. I have attached the current Powerepoint draft, the...

MGMT 640 Midterm Exam Ques. 1) Which of the following is not an advantage of the corporate form of business organization? a. Sell debt or equity in public capital markets b. Owners have limited...

The following frequencies of genotypes have been identified for the Inuit and Australian Aboriginal populations for the blood group antigens M and N. Inuit M/M 0.835 M/N 0.156 N/N 0.009 Australian...

You have forecast that United Sports, Inc. will pay a dividend of $0 next year (in time 1), $.40 two years from now (in time 2), $.80 three years from now (in time 3) and $1.30 four years from now...

How is malware detected when it has infected a target system? Each correct answer represents a complete solution. Choose all that apply. A Users notice abnormal behavior of their systems, ranging...

When is the top - down estimating approach most appropriate? Select an answer: when management buy - in is necessary when there is time to create an estimate with more critical purchases or projects...

Read the sections on expectancy, equity and goal- setting theories of motivation: 1 Which theory, or combination of theories, is most helpful in explaining your reaction to the rewards your...

1 W hat are the different reasons that companies might have for initiating training? McDonalds, the fast food chain, employs around 67,000 people in the UK. Although some argue there is a negative...

1 What theories are implicit in these reward systems?