Calculate the proceeds issue price of learned inc

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On January 1, 2016, Learned, Inc., issued $18 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2035.Table 6-4,Table 6-5 (Use appropriate factor from the table provided.)

Required:

Question a. Calculate the proceeds (issue price) of Learned, Inc.'s, bonds on January 1, 2016, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.)

Question b-1. Assume instead that the proceeds were $18,459,000. Use the horizontal model to record the payment of semiannual interest and the related premium amortization on June 30, 2016, assuming that the premium of $459,000 is amortized on a straight-line basis. (Use amounts with + for increases and amounts with - for decreases.)

Question b-2. Assume instead that the proceeds were $18,459,000. Record the journal entry to show the payment of semiannual interest and the related premium amortization on June 30, 2016, assuming that the premium of $459,000 is amortized on a straight-line basis. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Reference no: EM132692159

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