Flagstaff Systems issues bonds dated January 1 that pay interest semiannually on June 30 and December 31. The bonds have a $90,000 par value and an annual contract rate of 12%, and they mature in five years. Required For each separate situation, (a) determine the bonds’ issue price on January 1 and (b) prepare the journal entry to record their issuance. 1. The market rate at the date of issuance is 10%. 2. The market rate at the date of issuance is 12%. 3. The market rate at the date of issuance is 14%.
Flagstaff Systems issues bonds dated January 1 that pay interest semiannually on June 30 and December 31. The bonds have a $90,000 par value and an annual contract rate of 12%, and they mature in five years. Required For each separate situation, (a) determine the bonds’ issue price on January 1 and (b) prepare the journal entry to record their issuance. 1. The market rate at the date of issuance is 10%. 2. The market rate at the date of issuance is 12%. 3. The market rate at the date of issuance is 14%.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.1AP
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Question
Flagstaff Systems issues bonds dated January 1 that pay interest semiannually on June 30 and December
31. The bonds have a $90,000 par value and an annual contract rate of 12%, and they mature in five years.
Required
For each separate situation, (a) determine the
entry
1. The market rate at the date of issuance is 10%.
2. The market rate at the date of issuance is 12%.
3. The market rate at the date of issuance is 14%.
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