Microsoft Company sells $500,000 of bonds on January 1 2014. The face value is 10% interest paid twice per year on May 1st and November 1st. The market rate is 12%. The bonds are due in 3 1/2 years. Compute the price of the bonds at the date of issue. Prepare the journal entry for the date of issue. Prepare the amortzation schedule for the first two years.

Microsoft Company sells $500,000 of bonds on January 1 2014. The face value is 10% interest paid twice per year on May 1st and November 1st. The market rate is 12%. The bonds are due in 3 1/2 years. Compute the price of the bonds at the date of issue. Prepare the journal entry for the date of issue. Prepare the amortzation schedule for the first two years.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 7MCQ

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