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e Edit View History Window Help newconnect mheducation.com ESPN Yahoo! gold-soulia women's swi shophearts ???0ud Job Description Bing Yahoo Google wikipedia Facebook Twit Chapter 14 Quiz 4 Quiz Universal Foods issued 10% bonds, dated January 1, with a face amount of S110 milion on January 1, 2018. The bonds mature on December 31, 2037 (20 years. The market rate of interest for simlar issues was 12% interest is paid semiannualy on June 30 and December 31 Universal uses the straight-line method. evorsevost EVAot$1, PVAofS1. EVADatSI and PVAOOS? (Use appropriate factoris) from the tables provided.) Required 1. Determine the price of the bonds at January 1, 208 2. to 4. Prepare the journal entry to record their issuance by Unlversal Foods on January 1, 2018, interest on June 30, 2018 and interest on December 3t, 2025 Complete this question by entering your answers in the tabs below Req Req 2 to4 Determine the price of the bonds at January 1, 2018.(Enter your answers in whole dollars)Explanation / Answer
req 1) Price of the bond: coupon * PVIFA(market rate, n) + Par value * PVIF(market rate, n) Price of the bond= (110m*5%) * PVIFA(6%,40) + 110m * PVIF(6%,40) 5.5m * 15.0463 + 110m * 0.0972 = 93,446,650 req 2) Journal Entry: Date Accounts Titles Debit $ Credit $ Jan 1 2018 Cash 93446650 Discount on Bond issue 16553350 Bond payable 110000000 (being issue of bond on discount) 30-Jun-18 Interest Expense 5913833.75 Cash 5500000 Discount on Bond issue 413833.75 (16553350/40=413833.75) 31-Dec-25 Interest Expense 5913833.75 Cash 5500000 Discount on Bond issue 413833.75 (16553350/40=413833.75)
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