On December 31. 2020, Paulson company issues a 4-year bond with a par value of $100,000, a contract rate of 8% annually and semiannual interest payments. At time of issues, prevailing interest rates for bonds of similar credit quality and maturity are 10%. 1. Calculate the price of the bond are issued at and record the journal entry to record the bond issuance. (show your calculations) 2. Prepare the journal entry for the first interest payment on the bond.

On December 31. 2020, Paulson company issues a 4-year bond with a par value of $100,000, a contract rate of 8% annually and semiannual interest payments. At time of issues, prevailing interest rates for bonds of similar credit quality and maturity are 10%. 1. Calculate the price of the bond are issued at and record the journal entry to record the bond issuance. (show your calculations) 2. Prepare the journal entry for the first interest payment on the bond.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 16E

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