PNW company issues 6% 5-year bonds with a total face amount of $1,000,000 with interest paid semi-annually. The market rate ofinterest is 6.1%.PVPVA56.00%0.747264.212456.10%0.743744.2009103.00%0.744098.5302103.05%0.740498.50851What is the issue price of the bond?Record the issuance of the bond.DebitCreditWhat was the amount of the premium or discount?3What is the interest expense for the first interest payment?4What is the bond liability after the first interest payment?5What is the interest expense for the second interest payment?

“Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

PNW company issues 6% 5-year bonds with a total face amount of $1,000,000 with interest paid semi-annually. The market rate of interest is 6.1%. n % PV PVA 5 6.00% 0.74726 4.2124 6.10% 3.00% 3.05% 0.74374 4.2009 10 0.74409 8.5302 10 0.74049 8.5085 1 What is the issue price of the bond? 2 Record the issuance of the bond. Debit Credit

PNW company issues 6% 5-year bonds with a total face amount of $1,000,000 with interest paid semi-annually. The market rate of interest is 6.1%. n % PV PVA 5 6.00% 0.74726 4.2124 6.10% 3.00% 3.05% 0.74374 4.2009 10 0.74409 8.5302 10 0.74049 8.5085 1 What is the issue price of the bond? 2 Record the issuance of the bond. Debit Credit

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

See similar textbooks

Similar questions

Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity date. Interest is to be paid semi-annually and the market rate of interest is 8%. If the bonds sold at 113.55, what amount was received upon issuance?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the market rate was 4%. Interest was paid annually. The bonds were sold at 87.5. What was the sales price of the bonds? Were they issued at a discount, a premium, or at par?
A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market rate of 7%. Interest is paid annually. What is the amount of interest the bondholders will receive at the end of the year?
On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05
Haiku Inc. issued $600,000 of 10-year bonds with a stated rate of 11% when the market rate was 12%. The bonds pay interest semi-annually. Prepare the first three years of an amortization schedule. Assume that the bonds were issued for $565,710.
Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?
Pinetop Corporation issued $150,000 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the sale of the bonds?
On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Evie Inc. issued 50 bonds with a $1,000 face value, a five-year life, and a stated annual coupon of 6% for $980 each. What is the total amount of interest expense over the life of the bonds?