On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest paid semiannually on June 30 and December 31. The market yield for bond of similar risk and maturity is 7%. The fiscal year for the firm ends on December 31. A. Determine the price of the bonds issued on January 1. B. Prepare the amortization schedule for the bonds using the effective interest rate method. C. Prepare the journal entries to record: • Issuing bonds on January 1 • Paying interest on June 30, 2021 • Paying interest on Dec 31, 2021 • Repayment of the bonds on December 31, 2025.

On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest paid semiannually on June 30 and December 31. The market yield for bond of similar risk and maturity is 7%. The fiscal year for the firm ends on December 31. A. Determine the price of the bonds issued on January 1. B. Prepare the amortization schedule for the bonds using the effective interest rate method. C. Prepare the journal entries to record: • Issuing bonds on January 1 • Paying interest on June 30, 2021 • Paying interest on Dec 31, 2021 • Repayment of the bonds on December 31, 2025.

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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