Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term...
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Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2020 and received $540,000. Interest is payable annually. The premium is amortized using the straight- line method. 1. Prepare journal entries for the following transactions. a. July 1, 2020: entry to record issuing the bonds b. June 30, 2021: entry to record payment of interest to bondholders and record amortization of premium C. June 30, 2022: entry to record payment of interest to bondholders and record amortization of premium 2. What is the total amount of interest expense over the life of the bonds? 3. What is the present value of the bond and all interest payments? Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2020 and received $540,000. Interest is payable annually. The premium is amortized using the straight- line method. 1. Prepare journal entries for the following transactions. a. July 1, 2020: entry to record issuing the bonds b. June 30, 2021: entry to record payment of interest to bondholders and record amortization of premium C. June 30, 2022: entry to record payment of interest to bondholders and record amortization of premium 2. What is the total amount of interest expense over the life of the bonds? 3. What is the present value of the bond and all interest payments?
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