Comprehensive Bond Project

YOU MUST USE A FORMULA OR CELL REFERNCE WHERE POSSIBLE

Use the reference sheet Templates for Time Value of Money to create in excel a well-labeled amortization schedules and prepare the requested journal entries.

Please compute the initial present value of the Bond payable in excel (via functions) and also by hand using tables.

Prestige Inc. sells $500,000 of 10% bonds on June 1, 2015. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2020. The bonds yield 8%. On October 1, 2016, Caprio buys back $200,000 (face value) of bonds for $210,000 in cash (not including accrued interest which was paid separately also in cash). Provide the following:

1. The present value of the bond payable is $ ______________________ on June 1, 2015. Round to the nearest dollar.
2. Prepare a well-labeled schedule (with debits/credits shown) for the journal entries through the life of the Bond.
   3. Give all journal entries for:
      • 6/1/15
      • 12/1/15
      • 12/31/15
      • 6/1/16
      • 10/1/16 Update
      • 10/1/16 accrued interest payment
      • 10/1/16 redemption