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Prepare the journal entries by mcwherter

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McWherter Instruments sold $400 million of 8% bonds dated January 1 on January 1 2021. The bonds mature on December 31, 2040 (20 years). For bonds of similiar risk and maturity, the market yield was 10%. Interest is paid semiannually on June 30 and December 31st. Blanton Technologies inc, purchased $400,000 of the bonds as long term investment.

Problem 1: Determine the price of the bonds issued on January 1st, 2021

Problem 2: Prepare the Journal entries to record (a) their issuance by McWherter and (b) blantons investment on January 1, 2021

Problem 3: Prepare the Journal entry by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at effective rate)

Problem 4: Prepare the journal entries by (a) McWherter and (b) blanton to record interest on December 31, 2021 (at effective rate)

Reference no: EM132774589

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