On 2/1/2012, the Union Company issued an amount of 1,500,000 dinars in the form of bonds with a value of 10% due on December 31, 2021. Note that the interest rate in the market is 11%. Interest on the bonds is accrued annually at the end of each year on 12/31. The bond carries a callable bond, and the company decided to use the real interest method to amortize the difference between the bond interest rate and the market price, and on 1/2/2015, Al-Ittihad decided to call the bond (pay the bond value) at 1,010,000 dinars of the face value for bonds.
Required:
(A) Determining the price of Union Company bonds when they are issued on 2/1/2012.
(B) Determining the book value of the bond in 2016. (Through the amortization schedule for the period 2012-2016 or using the formula)
(C) Preparing the journal entries for the bond payment on 2/1/2015.

Answer rating: 100% (QA)

Step Callable bonds are those bonds which can be called by the company at any time prior to maturity ... View the full answer