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Williams Co. recently issued bonds with a face value of 10,000,000 and a coupon rate of...

Williams Co. recently issued bonds with a face value of 10,000,000 and a coupon rate of 3% for 8 years. The current market rate of interest is 4% and the bonds pay interest semiannually.

1) Please compute the issuing price of the bond, using a financial calculator or Excel. [Note: you don't have to show me the Present Value (PV) of the principle or PV of the interest payment. All I am asking for is a number for the PV of the bonds or cash flows]

2) Please write down the journal entries reflecting the premium or discounts of this bond issuance. [Hint: How much is the premium or discount on the bond issue date?]

3)  Please write down the journal entries reflecting this amortization of the premium or discount at the end of the first year (2 payments) [Hint: How much is the amortized premium or discount at the end of the first year (2 payments)? ].

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ekkarill92 answered 1 year ago
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