1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in five years. The market yield for bonds of similar risk and maturity is 8%. INSTRUCTIONS: 1. Determine the price of these bonds that are issued to yield the 8% market rate using the Time Value of Money Tables. Include the table and relevant components for each factor used. 2. Record the issuance of these bonds by Lansing Group. 3. Prepare an amortization schedule that determines interest at the effective rate through the maturity date of the bonds. 4. Prepare the entries to record the interest on June 30, 2024, and December 31, 2024. 5. Assume that Lansing Group retires the bonds on January 1, 2026, paying $1,027,544. Prepare the entry to record the retirement.
1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in five years. The market yield for bonds of similar risk and maturity is 8%. INSTRUCTIONS: 1. Determine the price of these bonds that are issued to yield the 8% market rate using the Time Value of Money Tables. Include the table and relevant components for each factor used. 2. Record the issuance of these bonds by Lansing Group. 3. Prepare an amortization schedule that determines interest at the effective rate through the maturity date of the bonds. 4. Prepare the entries to record the interest on June 30, 2024, and December 31, 2024. 5. Assume that Lansing Group retires the bonds on January 1, 2026, paying $1,027,544. Prepare the entry to record the retirement.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...
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![1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is payable
semiannually on June 30 and December 31. The bonds mature in five years. The market yield for bonds
of similar risk and maturity is 8%.
INSTRUCTIONS:
1.
Determine the price of these bonds that are issued to yield the 8% market rate using the Time
Value of Money Tables. Include the table and relevant components for each factor used.
2. Record the issuance of these bonds by Lansing Group.
3.
Prepare an amortization schedule that determines interest at the effective rate through the
maturity date of the bonds.
4.
Prepare the entries to record the interest on June 30, 2024, and December 31, 2024.
5. Assume that Lansing Group retires the bonds on January 1, 2026, paying $1,027,544. Prepare the
entry to record the retirement.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbed15560-1d83-46ca-b83a-f922afd964ec%2F9cfe0fd5-f002-4a1d-af37-5f00cc1e6886%2Fckt9rvb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is payable
semiannually on June 30 and December 31. The bonds mature in five years. The market yield for bonds
of similar risk and maturity is 8%.
INSTRUCTIONS:
1.
Determine the price of these bonds that are issued to yield the 8% market rate using the Time
Value of Money Tables. Include the table and relevant components for each factor used.
2. Record the issuance of these bonds by Lansing Group.
3.
Prepare an amortization schedule that determines interest at the effective rate through the
maturity date of the bonds.
4.
Prepare the entries to record the interest on June 30, 2024, and December 31, 2024.
5. Assume that Lansing Group retires the bonds on January 1, 2026, paying $1,027,544. Prepare the
entry to record the retirement.
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