valuè: 1.66 points Exercise 14-3 Computing bond interest and price; recording bo

Question

valuè: 1.66 points Exercise 14-3 Computing bond interest and price; recording bond issuance LO Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rale for the bonds is 8%CableB.1 TableB2. Table B 3. and Table (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? SemiannualSemiannual cash interest payment Par (maturity) value Rate 800,000 24.000

Explanation / Answer

Bringham Company All Amounts in $ 1. Semiannual Interest payment for the bonds = $ 800,000 X 6% X 6/12 = $ 24,000. 2. Current Price of the Bonds on the issue date is $ 691,277.39. 3. Journal Entry for issuance of bonds Cash A/c 800000 To 6% Bonds A/c 800000

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