On February 1, 2023, Wege Corporation issued $900,000 in long-term bonds. The bonds will mature in 20 years and have a stated interest rate of 7% and a market interest rate of 8%. The bonds pay interest semiannually on February 1 and August 1 of each year. The bonds are accounted for using the effective- interest method. Required: Use Microsoft Excel a) Compute the price of the bonds, using a financial calculator. (Round to the nearest dollar.) List and label the inputs you used. b)Write the journal entry to record the issuance of the bonds. c)Construct in good form (including a heading) a bond amortization table for this problem to indicate the date, the amount of cash paid, interest expense, amortization of discount or premium, and carrying value at the date of issuance and for each interest payment date through August 1, 2024. Make sure all columns and rows are properly labeled. (Round amounts to the nearest dollar.) d)Write the journal entries related to the bonds for the following two dates: August 1, 2023 and February 1, 2024.

On February 1, 2023, Wege Corporation issued $900,000 in long-term bonds. The bonds will mature in 20 years and have a stated interest rate of 7% and a market interest rate of 8%. The bonds pay interest semiannually on February 1 and August 1 of each year. The bonds are accounted for using the effective- interest method. Required: Use Microsoft Excel a) Compute the price of the bonds, using a financial calculator. (Round to the nearest dollar.) List and label the inputs you used. b)Write the journal entry to record the issuance of the bonds. c)Construct in good form (including a heading) a bond amortization table for this problem to indicate the date, the amount of cash paid, interest expense, amortization of discount or premium, and carrying value at the date of issuance and for each interest payment date through August 1, 2024. Make sure all columns and rows are properly labeled. (Round amounts to the nearest dollar.) d)Write the journal entries related to the bonds for the following two dates: August 1, 2023 and February 1, 2024.

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 7C

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