Reference no: EM132494086
Nordic Company issued bonds with the following provisions: Maturity value: $60,000,000.Interest: 7.9 percent per annum payable semi-annually each June 30 and December 31.Terms: Bonds dated January 1, 2017, due five years from that date.The company's fiscal year ends on December 31. The bonds were sold on January 1, 2017, at a yield of 8 percent.
Required:
Question 1: Compute the issue (sale) price of the bonds. (Round time value factor to 4 decimal places. Round the final answer to the nearest whole dollar.)
Question 2: Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answers to the nearest whole dollar.)
Question 3: Prepare the journal entries at the following dates: June 30, 2017; December 31, 2017; and June 30, 2018. Use the effective-interest method to amortize bond discount or premium. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answers to the nearest whole dollar.)
Question 4: How much interest expense would be reported on the statement of earnings for 2017? (Round intermediate and final answer to the nearest whole dollar.)
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