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Calculate the present value of the bond

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Reference no: EM133112556

Question - On January 1st, 20Y1 Buckle Corporation issued $160,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 15%. Interest on the bonds is payable on April 30th, August 31st, and December 31st. The company's fiscal year is the calendar year. Any discount or premium is amortized using the straight-line method. Present Value factors to Select from:

Present Value of $1 at Compound Interest, 10 periods, 12% 0.45235

Present Value of $1 at Compound Interest, 10 periods, 15% 0.37594

Present Value of $1 at Compound Interest, 30 periods, 4% 0.30832

Present Value of $1 at Compound Interest, 30 periods, 5% 0.23138

Present Value of an Ordinary Annuity, 10 periods, 12% 5.65022

Present Value of an Ordinary Annuity, 10 periods, 15% 5.01877

Present Value of an Ordinary Annuity, 30 periods, 4% 17.29203

Present Value of an Ordinary Annuity, 30 periods, 5% 15.37245

Required -

1. Calculate the present value of the bond.

2. Calculate the price of the bond at issuance.

3. Prepare the journal entry to record the issuance of the bond. Journal entry description not required.

4. Prepare the journal entry to record the 1st interest payment. If necessary, round figures to the nearest whole dollar. Journal entry description not required.

Reference no: EM133112556

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