The Bradford Company issued 12% bonds, dated January 1, with a face amount of $86 million on January 1, 2024. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. to 4. Prepare the journal entries to record their issuance by The Bradford Company on January 1, 2024, interest on June 30, 2024 (at the effective rate) and interest on December 31, 2024 (at the effective rate). 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)
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $86 million on January 1, 2024. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. to 4. Prepare the journal entries to record their issuance by The Bradford Company on January 1, 2024, interest on June 30, 2024 (at the effective rate) and interest on December 31, 2024 (at the effective rate). 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)
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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The Bradford Company issued 12% bonds, dated January 1, with a face amount of $86 million on January 1, 2024.
- The bonds mature on December 31, 2033 (10 years).
- For bonds of similar risk and maturity, the market yield is 14%.
- Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2024.
2. to 4. Prepare the
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)
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