Issuance of a bond at face value

Reference no: EM13953543

Issuance of a Bond at Face Value

On January 1, 2014, Whitefeather Industries issued 300, $1,000 face value bonds. The bonds have a five-year life and pay interest at the rate of 10%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 was 10%.

Required:

1. Calculate the issue price of the bonds and record the issuance of the bonds on January 1, 2014.

2. Explain how the issue price would have been affected if the market rate of interest had been higher than 10%.

3. Prepare the journal entry to record the payment of interest on July 1, 2014.

4. Calculate the amount of interest accrued on December 31, 2014.

Reference no: EM13953543

Questions Cloud

Describe the background theory and human nature : Use the chart template to analyze counseling theories. Select two theories from this week's Learning Resources. Describe the background theory, human nature, major constructs, applications, and evaluations of each counseling theory

What is vertical location of mirror relative to level : Standing 2.0 m in front of a small vertical mirror, you see the reflection of your belt buckle, which is 0.70 m below your eyes. What is the vertical location of the mirror relative to the level of your eyes and what angle do your eyes make with t..

What is the probability for each of the outcomes : Did anything surprising or unexpected happen in your results for this experiment?

What is the overall magnification of the combination : A 17.9-cm focal-length lens is used to project 35-mm slides onto a screen 4.27 m from the projector lens. What must be the size of the screen if the image of the slide is to just fill the screen? The dimensions of the image on the slide are 23.5 m..

Issuance of a bond at face value : On January 1, 2014, Whitefeather Industries issued 300, $1,000 face value bonds. The bonds have a five-year life and pay interest at the rate of 10%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 w..

Deferred tax account for kunkel corporation : Calculate the balance to be reflected in the Deferred Tax account for Kunkel Corporation for each year 2014 through 2018.

Temporary and permanent differences : Madden Corporation wants to determine the amount of deferred tax that should be reported on its 2014 financial statements. It has compiled a list of differences between the accounting conducted for tax purposes and the accounting used for financia..

What is the measurement of each of the angles of rectangle : 68% it will rain tomorrow. What is the probability it will not rain tomorrow?

What is the minimum thickness of the sheet : Laser light 633nm is normally incident on a 0.100-mm-wide slit in a thin opaque plastic sheet floating on the surface of a swimming pool. Calculate the width of the central maximum at the bottom of the pool 4.50 m below the surface?

User Account

All Pages