On January 1, 2024, Cool Universe issued 10% bonds dated January 1, 2024, with a face amount of $20.1 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and Decembe 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on January 1, 2024. 2. Prepare the journal entry to record the bond issuance by Cool on January 1, 2024. 3. Prepare the journal entry to record interest on June 30, 2024, using the straight-line method. 4. Prepare the journal entry to record interest on December 31, 2024, using the straight-line method. Complete this question by entering your answers in the tabs below.
On January 1, 2024, Cool Universe issued 10% bonds dated January 1, 2024, with a face amount of $20.1 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and Decembe 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on January 1, 2024. 2. Prepare the journal entry to record the bond issuance by Cool on January 1, 2024. 3. Prepare the journal entry to record interest on June 30, 2024, using the straight-line method. 4. Prepare the journal entry to record interest on December 31, 2024, using the straight-line method. Complete this question by entering your answers in the tabs below.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PB: Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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![On January 1, 2024, Cool Universe issued 10% bonds dated January 1, 2024, with a face amount of $20.1 million. The bonds mature in
2033 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December
31.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Determine the price of the bonds on January 1, 2024.
2. Prepare the journal entry to record the bond issuance by Cool on January 1, 2024.
3. Prepare the journal entry to record interest on June 30, 2024, using the straight-line method.
4. Prepare the journal entry to record interest on December 31, 2024, using the straight-line method.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 4
Check n
Determine the price of the bonds on January 1, 2024.
Note: Enter your answers in whole dollars not in millions (l.e., 1,000,000 not 1). Round your intermediate calculations and final
answer to the nearest whole dollar.
Price of the bonds](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F049bb350-0d31-43d4-be42-fbb35c6deeae%2Fd0310090-f435-4665-9399-f603f9a067f7%2Fiancevs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2024, Cool Universe issued 10% bonds dated January 1, 2024, with a face amount of $20.1 million. The bonds mature in
2033 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December
31.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Determine the price of the bonds on January 1, 2024.
2. Prepare the journal entry to record the bond issuance by Cool on January 1, 2024.
3. Prepare the journal entry to record interest on June 30, 2024, using the straight-line method.
4. Prepare the journal entry to record interest on December 31, 2024, using the straight-line method.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 4
Check n
Determine the price of the bonds on January 1, 2024.
Note: Enter your answers in whole dollars not in millions (l.e., 1,000,000 not 1). Round your intermediate calculations and final
answer to the nearest whole dollar.
Price of the bonds
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Step 1: Introduction and solution planning.
VIEWStep 2: (1) Determination of price of bonds on January 1, 2024.
VIEWStep 3: (2) Preparation of journal entry to record the bonds issuance with explanation of debit and credit.
VIEWStep 4: (3) Preparation of Journal entry to record interest on June 30, 2024 using straight line method.
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