a. Calculate the price of the bond given the following information: On January 1, 2021, Oaxa...

 

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a. Calculate the price of the bond given the following information: On January 1, 2021, Oaxa Manufacturing issued $900,000 of 8% bonds dated January 1,2021. Interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The market yield for bonds of similar risk and maturity is 10%. Duzen Inc. purchased the entire issue and will hold them to maturity. Note the present value of an ordinary annuity of $1,5%, n=6 is 5.07569 the present value of $1, 5%, n-6 is 0.74622 a. calculation for the price. I b. Prepare the journal entry for the issuer on January 1, 2021. issuer entry a. Calculate the price of the bond given the following information: On January 1, 2021, Oaxa Manufacturing issued $900,000 of 8% bonds dated January 1,2021. Interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The market yield for bonds of similar risk and maturity is 10%. Duzen Inc. purchased the entire issue and will hold them to maturity. Note the present value of an ordinary annuity of $1,5%, n=6 is 5.07569 the present value of $1, 5%, n-6 is 0.74622 a. calculation for the price. I b. Prepare the journal entry for the issuer on January 1, 2021. issuer entry

Answer rating: 100% (QA)

Answer Step 1 Calculation of Bond price i Interest 9000004 36000 ii Interest Present v... View the full answer