a)WHAT IS THE PRICE OFA 934k Bond, 5 years @16% Interest, MKT rate 12%, interest paid...

Transcribed Image Text:

a)WHAT IS THE PRICE OFA 934k Bond, 5 years @16% Interest, MKT rate 12%, interest paid yearly; Journalize the sale on 1-1-2015. What is Bond selling at "101, 103, 105, for instance?" PRESENT VALUE OF $1 FOR FIVE YEARS at 12% .56743 Present value of annuity for five years at 12% 3.6048 b) Journalize the payment of interest expense for the first three years;12-31- 2015, 12-31-2016, and 12-31-2017, amortizing the premium/discount using the effective rate of interest. c) Journalize the payment of interest expense for the first three years;12-31- 2015, 12-31-2016, and 12-31-2017, amortizing the premium/discount using the straight-line rate of interest. d) ON 1-1-2018, the Bond was converted to 10k common stock shares at $14/share market value. The par value of the stock is $10/share. Journalize this transaction using the results of amortization in "c)". a)WHAT IS THE PRICE OFA 934k Bond, 5 years @16% Interest, MKT rate 12%, interest paid yearly; Journalize the sale on 1-1-2015. What is Bond selling at "101, 103, 105, for instance?" PRESENT VALUE OF $1 FOR FIVE YEARS at 12% .56743 Present value of annuity for five years at 12% 3.6048 b) Journalize the payment of interest expense for the first three years;12-31- 2015, 12-31-2016, and 12-31-2017, amortizing the premium/discount using the effective rate of interest. c) Journalize the payment of interest expense for the first three years;12-31- 2015, 12-31-2016, and 12-31-2017, amortizing the premium/discount using the straight-line rate of interest. d) ON 1-1-2018, the Bond was converted to 10k common stock shares at $14/share market value. The par value of the stock is $10/share. Journalize this transaction using the results of amortization in "c)".

Answer rating: 100% (QA)

A 934 K is a type of bond issued in the year 2015 Amortization using straight line interest means that by the end of 5th year in this case the book va... View the full answer