CHAPTER 14 BONDS AND LONG TERM NOTES Question 1 What are the two main methods of company financing? Question 2 What are the problems (if any) of raising funds by issuing common stock? Question 3 What are the key components of a bond? Question 4 What are the different types of bonds? What are the c Question5 On January 1, 2015, Masterwear Industries issued $700,000 of 12% bonds. Interest s of each? is payable semiannually on June 30 and December 31. The entire bond issue was sold to United Intergroup inc., at the face amount Required Prepare journal entries to record this transaction from the view point of Masterwear Industries. Prepare journal entries to record this transaction from the view point of the buyer, United Intergroup inc. 2. 3. Prepare a journal entry for Masterwear Industries recording the interest owed on June 30. Question 6 How are bonds graded (evaluated)? Question 7 On January 1, 2015, Masterwear Industries issued $700,000 of 12% bonds, dated January 1, Interest of $42,000 is payable semiannually on June 30 and December 31. The bonds mature in three years. The market yield for bonds of similar risk and maturity is 14%. Required 1. What is the current market price of the bonds? 2. What is the journal entry in the books of Masterwear Industries,if hey had sold the bonds at the current market price instead of the face amount