m Corporation issued 5-year bonds with a face value of $250,000 on July 1, 2022, in order to fund a plant expansion. The bonds mature on June 30th, 2027, with interest payable on December 31, and June 30. The contract (stated) rate of interest is 10%. When the bonds sold in the marketplace, the market rate of interest was 10.6%. Elm’s fiscal year ends on December 31. 1) At what price were the bonds issued? Prepare the journal entry. What would be the price quote for the bonds? 2) Prepare the journal entry for December 31, 2022. What would the semiannual interest entry be under the straight-line method?
m Corporation issued 5-year bonds with a face value of $250,000 on July 1, 2022, in order to fund a plant expansion. The bonds mature on June 30th, 2027, with interest payable on December 31, and June 30. The contract (stated) rate of interest is 10%. When the bonds sold in the marketplace, the market rate of interest was 10.6%. Elm’s fiscal year ends on December 31. 1) At what price were the bonds issued? Prepare the journal entry. What would be the price quote for the bonds? 2) Prepare the journal entry for December 31, 2022. What would the semiannual interest entry be under the straight-line method?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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Elm Corporation issued 5-year bonds with a face value of $250,000 on July 1, 2022, in order to fund a plant expansion. The bonds mature on June 30th, 2027, with interest payable on December 31, and June 30. The contract (stated) rate of interest is 10%. When the bonds sold in the marketplace, the market rate of interest was 10.6%. Elm’s fiscal year ends on December 31.
1) At what price were the bonds issued? Prepare the
2) Prepare the journal entry for December 31, 2022. What would the semiannual interest entry be under the straight-line method?
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