Prepare journal entry to record issuance by instaform

Reference no: EM132682871

On January 1, 2018, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2037 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually.

Required:

Question 1. Determine the price of the bonds at January 1, 2018, and prepare the journal entry to record their issuance by Instaform.

Question 2. Assume the market rate was 9%. Determine the price of the bonds at January 1, 2018, and prepare the journal entry to record their issuance by Instaform.

Question 3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.

Reference no: EM132682871

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