Calculate the issue price of the bonds

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Question - Cold Lake Co. issues $1 .000.000 at 10-year. 6% bonds on January 1. 2021. The bonds pay interest annually on December 31.

Required -

a. Calculate the issue price of the bonds using a market rate of 4% and record the bond issue.

b. Prepare the journal entries to record the first three interest payments. Ignore any year end accruals of interest.

c. Assuming Cold Lake has an October 31 year end, prepare the adjusting entry tor interest on October 31.2021.

d. Repeat part a, assuming instead a market interest rate of 8%. Round amounts to the nearest dollar.

Reference no: EM133161578

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