Find out the price of the bonds at january

Assignment Help Financial Accounting

Reference no: EM13129323

On January 1, 2011, Shirley Corporation purchased 10% bonds dated January 1, 2011, with a face amount of $10 million. The bonds mature in 2020 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

Required:

1. Determine the price of the bonds at January 1, 2011.

2. Prepare the journal entry to record the bond purchase by Shirley on January 1, 2011.

3. Prepare the journal entry to record interest on June 30, 2011, using the effective interest method.

4. Prepare the journal entry to record interest on December 31, 2011, using the effective interest method.

Reference no: EM13129323

Questions Cloud

Reviewing literature : In reviewing literature, one can make the point that one does not just report the literature but also evaluates, organizes, and synthesizes. How can one do this if the literature gives divergent perspectives and there is no absolute common theme?

Calculate the ionization energy for hydrogen : You dissolve 12.6352 g of potassium iodide in water and bring the volume of solution to 250.0 ml. What is the molar concentration of KI and what volume of 0.0436 molar hydrochloric acid is required to react with 30.0 ml of 0.0278 molar LiOH?

Determining integrating technology : Explain the importance of appropriately integrating Texas Instruments' CBL 2 (Calculator Based Laboratory), CBR 2 (Calculator Based Ranger), Fathom, a powerful data analysis software tool from Key Curriculum Press, and Excel into the middle school..

What is opinion concerning upstream and downstream sales : What is the purpose of a deposition at the trial phase of a company financial statement?

Find out the price of the bonds at january : For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Find out the price of the bonds at January 1, 2011.

Prepare a journal entry with a straight line method : A company issued 10%, 10 year bond payable with a par value of 720,000. The bonds were issued for 817,860 cash, which provided the holders an annual yield of 8%. Prepare a journal entry with a straight line method for the first semiannual interest..

What is the final temperature : What is the final temperature when 125 g of iron at 92.3 °C is dropped into 50.0 g of water at 27.7 °C? The specific heat of iron is 0.444 J g-1 °C-1 and the specific heat of water is 4.184 J g-1 °C-1.

Audit functions in your organization : Relate your explanation to the audit functions in your organization, or an organization with which you are familiar.

Explain important information about proteins : Important information about Proteins, A globular protein in aqueous surroundings contains the following amino acid residues; phenylamine, methionine, glutamate, lysine, and alanine.

User Account

All Pages