Citywide Company issues bonds with a par value of $85,000. The bonds mature in seven years and pay 10% annual interest in semiannual payments. The annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. 1. Compute the price of the bonds as of their issue date. 2. Prepare the journal entry to record the bonds' issuance.

Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter11: Bond Pricing And Amortization (bonds)
Section: Chapter Questions
Problem 1R: The University Club recently issued 1,500,000 of 10-year, 9% bonds at an effective interest rate of...
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Citywide Company issues bonds with a par value of $85,000. The bonds mature in seven years and pay 10% annual interest in
semiannual payments. The annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4)
Note: Use appropriate factor(s) from the tables provided.
1. Compute the price of the bonds as of their issue date.
2. Prepare the journal entry to record the bonds' issuance.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the price of the bonds as of their issue date.
Note: Round Intermediate calculations to the nearest dollar amount.
Table Values are Based on:
Cash Flow
Par (maturity) value
Interest (annuity)
Price of bonds
n =:
Table Value
Amount
< Required 1
Present Value
$
Required 2 >
0
Transcribed Image Text:Citywide Company issues bonds with a par value of $85,000. The bonds mature in seven years and pay 10% annual interest in semiannual payments. The annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. 1. Compute the price of the bonds as of their issue date. 2. Prepare the journal entry to record the bonds' issuance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the price of the bonds as of their issue date. Note: Round Intermediate calculations to the nearest dollar amount. Table Values are Based on: Cash Flow Par (maturity) value Interest (annuity) Price of bonds n =: Table Value Amount < Required 1 Present Value $ Required 2 > 0
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