Compute the amount received for the bonds

Reference no: EM13664550

1-Alma's Company issued $400,000 face value of 18 percent, 20-year junk bonds on 2010 October 1. The bonds are dated 2010 October 1, call for semiannual interest payments on April 1 and October 1, and are issued to yield 16 percent (8 percent per period).

a) Compute the amount received for the bonds.
b) Prepare an amortization schedule. Enter data in the schedule for only the first two interest periods. Use the interest method and make all calculations to the nearest dollar.
c) Prepare entries to record the issuance of the bonds, the first six months interest on the bonds, and the adjustment needed on June 30, 2011, assuming the company's fiscal year ends on that date.

Reference no: EM13664550

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