June 1, 2005, Jefferson Controls, Inc. issued $12,000,000 of 10 percent bonds to yield 12 percent....
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June 1, 2005, Jefferson Controls, Inc. issued $12,000,000 of 10 percent bonds to yield 12 percent. Interest is payable semiannually on May 31 and November 30. The bonds mature in 15 years. Jefferson Controls, Inc. is a calendar-year corporation. (1) Determine the issue price of the bonds. Show computations. (2) Prepare an amortization table through the first two interest periods using the effective-interest method. (3) Prepare the journal entries to record bond-related transactions as of the following dates: (a) June 1, 2005 (b) November 30, 2005 (c) December 31, 2005 (d) May 31, 2006 June 1, 2005, Jefferson Controls, Inc. issued $12,000,000 of 10 percent bonds to yield 12 percent. Interest is payable semiannually on May 31 and November 30. The bonds mature in 15 years. Jefferson Controls, Inc. is a calendar-year corporation. (1) Determine the issue price of the bonds. Show computations. (2) Prepare an amortization table through the first two interest periods using the effective-interest method. (3) Prepare the journal entries to record bond-related transactions as of the following dates: (a) June 1, 2005 (b) November 30, 2005 (c) December 31, 2005 (d) May 31, 2006
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Answer rating: 100% (QA)
To calculate the issue price of the bonds we can use the present value formula The present value of the bond is the sum of the present values of the f... View the full answer
Related Book For
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina
Posted Date:
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