Question
In: Accounting
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face...
On January 1, 2018, Bishop Company issued 8% bonds dated January
1, 2018, with a face amount of $20.2 million. The bonds mature in
2027 (10 years). For bonds of similar risk and maturity, the market
yield is 10%. Interest is paid semiannually on June 30 and December
31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD
of $1) (Use appropriate factor(s) from the tables provided.
Round your intermediate calculations to the nearest whole
dollar.)
Required:
1. Determine the price of the bonds at January 1,
2018.
2. Prepare the journal entry to record the bond
issuance by Bishop on January 1, 2018.
3. Prepare the journal entry to record interest on
June 30, 2018, using the effective interest method.
4. Prepare the journal entry to record interest on
December 31, 2018, using the effective interest method.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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the market yield is 12%. Interest is paid semiannually on June 30
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