1. On January 1, 2019 RockSolo Group issued $20 million of 6% bonds. Interest is payable...

1. On January 1, 2019 RockSolo Group issued $20 million of 6% bonds. Interest is payable semiannually on June 30th and December 31. The bonds were issued at an effective annual rate of 5% and mature in 10 years.

a. Compute this issuance price for these bonds and prepare the journal entry to record their issuance.

b. Prepare an amortization table that covers the first four coupon payments made related to these bond

now assume that RockSolo incurred $500,000 of debt issuance costs associated with these bonds.
1. Revise your journal entry above to record the original issuance of these bonds

What is the effective interest rate on these bonds, when considering the debt issuance costs? (One again, you know PV, Pmt, FV and N). Solve for I.

Expert Solution

ekkarill92 answered 1 year ago

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