Exercise 14-14 (Algo) New debt issues; offerings announcements [LO14-2] When companies offer new debt security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the debt offerings reported in December 2024: New Securities Issues Corporate National Equipment Transfer Corporation—$212 million bonds via lead managers Second Tennessee Bank N.A. and Morgan, Dunavant & Company, according to a syndicate official. Terms: maturity, December 15, 2033; coupon 7.58%; issue price, par; yield, 7.58%; noncallable; debt ratings: Ba-1 (Moody's Investors Service, Incorporated), BBB+ (Standard & Poor's). IgWig Incorporated—$362 million of notes via lead manager Stanley Brothers, Incorporated, according to a syndicate official. Terms: maturity, December 1, 2035; coupon, 6.58%; Issue price, 99; yield, 6.68%; call date, NC; debt ratings: Baa-1 (Moody's Investors Service, Incorporated), A (Standard & Poor's). Required: Prepare the appropriate journal entries to record the sale of both issues to underwriters. Ignore share issue costs and assume no accrued interest. Prepare the appropriate journal entries to record the first semiannual interest payment for both issues.
Exercise 14-14 (Algo) New debt issues; offerings announcements [LO14-2] When companies offer new debt security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the debt offerings reported in December 2024: New Securities Issues Corporate National Equipment Transfer Corporation—$212 million bonds via lead managers Second Tennessee Bank N.A. and Morgan, Dunavant & Company, according to a syndicate official. Terms: maturity, December 15, 2033; coupon 7.58%; issue price, par; yield, 7.58%; noncallable; debt ratings: Ba-1 (Moody's Investors Service, Incorporated), BBB+ (Standard & Poor's). IgWig Incorporated—$362 million of notes via lead manager Stanley Brothers, Incorporated, according to a syndicate official. Terms: maturity, December 1, 2035; coupon, 6.58%; Issue price, 99; yield, 6.68%; call date, NC; debt ratings: Baa-1 (Moody's Investors Service, Incorporated), A (Standard & Poor's). Required: Prepare the appropriate journal entries to record the sale of both issues to underwriters. Ignore share issue costs and assume no accrued interest. Prepare the appropriate journal entries to record the first semiannual interest payment for both issues.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter11: Notes, Bonds, And Leases
Section: Chapter Questions
Problem 32P
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Exercise 14-14 (Algo) New debt issues; offerings announcements [LO14-2]
When companies offer new debt security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the debt offerings reported in December 2024:
| New Securities Issues |
| Corporate |
| National Equipment Transfer Corporation—$212 million bonds via lead managers Second Tennessee Bank N.A. and Morgan, Dunavant & Company, according to a syndicate official. Terms: maturity, December 15, 2033; coupon 7.58%; issue price, par; yield, 7.58%; noncallable; debt ratings: Ba-1 (Moody's Investors Service, Incorporated), BBB+ (Standard & Poor's). |
| IgWig Incorporated—$362 million of notes via lead manager Stanley Brothers, Incorporated, according to a syndicate official. Terms: maturity, December 1, 2035; coupon, 6.58%; Issue price, 99; yield, 6.68%; call date, NC; debt ratings: Baa-1 (Moody's Investors Service, Incorporated), A (Standard & Poor's). |
Required:
- Prepare the appropriate
journal entries to record the sale of both issues to underwriters. Ignore share issue costs and assume no accrued interest. - Prepare the appropriate journal entries to record the first semiannual interest payment for both issues.
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