On January 1, 2018, Bradley Recreational Products issued $125,000, 10%, four-year bonds. Interest is paid semiannually...

Required:

1. Prepare an amortization schedule that determines interest at the effective interest rate. (Enter your answers in whole dollars.)

Payment Number Cash Payment Effective Interes t Increase in Balance Carrying Value

Totals

2. Prepare an amortization schedule by the straight-line method. Payment Number Cash Payment Recorded Interest Increase in Balance Carrying Value 1 2 3 4 5 6 7 8 Totals 3. Prepare the journal entries to record interest expense on June 30, 2020, by each of the two approaches. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

a. Record interest expense on June 30, 2020, by the effective interest method.

b. Record interest expense on June 30, 2020, by the straight-line method.

4. Assuming the market rate is still 12%, what price would a second investor pay the first investor on June 30, 2020, for $15,000 of the bonds? (Round your intermediate calculation and final answer to whole dollars.)

Price of the bonds …..?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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