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Question

ome File Edit View History Bookmarks People Window Help O Not Secure ezto.mheducation.com/m.tpx 10 Problemms Question 6 fof 2 5.00 points Hartford Research issues bonds dated January 1, 2016, that pay interest amual oontract rate of 8%, and they mature in 10 years aab..1.Tble B2, htie 0.3 and Tabl, B4) (use appropriate facto Required: Consider each of the following three separate situations 1. The market rate at the date of issuance is 6%. semiannually on June 30 and December 31. The bonds have a $24,000 par value and an s) from the tables provided) (a) Complete the below table to determine the bonds' issue price on January 1, 2016 Flow Table Value Amount Par (maturity) value nterest (annuity) Price of bonds (b) Prepare the journal entry to recond their issuance 8 MacBook Air

Explanation / Answer

(a) Price of the Bond

n =

10 yrs x 2 = 20 Years

I =

6%/2 = 3%

Cash flow

Table Value

Amount

Present Value

Par Value

$24000

0.5537

13289

Interest

$960

14.8775

14282

Price of Bonds

27571

(b)Journal Entry to record Issuance of Bond

Cash A/c

$27,571

To Premium on bond payable A/c

$3,571

To Bond Payable

$24,000

n =