Tarawa Limited issued $1 million of 10-year, 5% bonds on January 1, 2015, at a price to
Question:
Tarawa Limited issued $1 million of 10-year, 5% bonds on January 1, 2015, at a price to yield a market interest rate of 6%. Interest is payable semi-annually on July 1 and January 1. Tarawa has a December 31 year end.
Instructions
(a) Calculate the bonds' present value (issue price) on January 1.
(b) Record the issue of the bonds on January 1.
(c) Record the payment of interest on July 1.
(d) Record the accrual of interest on December 31.
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Step by Step Answer:
a Key inputs Future value FV 1000000 Market interest rate i 3 6 6 12 I...View the full answer
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Related Book For 
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
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