Question
In: Finance
On January 1, 2017, SDNOB Company issues 16%, $5,000,000 4-year bonds and the bonds pay interest...
On January 1, 2017, SDNOB Company issues 16%, $5,000,000 4-year bonds and the bonds pay interest quarterly on Mar 31, Jun 30, Sep 30, and Dec 31 each year. The prevailing market interest rate at the date of issue is 12%. Use the Effective Interest Rate method of amortization.
REQUIRED:
1. Calculate the price of the bonds at the issue date
2. Prepare a partial amortization table only for the first 2½ years using the table given below
3. Prepare journal entries to record the following:
(a) Payment of interest on June 30, 2018
(b) Due to high interest rates in 2019, assume that the company retires the bonds on 6/30/2019 at 93.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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