Reference no: EM132576840

Complete the below table to calculate the price of a $1.6 million bond issue under each of the following independent assumptions (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1):

1. Maturity 13 years, interest paid annually, stated rate 9%, effective (market) rate 12%.

2. Maturity 10 years, interest paid semiannually, stated rate 9%, effective (market) rate 12%.

3. Maturity 6 years, interest paid semiannually, stated rate 11%, effective (market) rate 10%.

4. Maturity 10 years, interest paid semiannually, stated rate 11%, effective (market) rate 10%.

5. Maturity 10 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%.

LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2021. In payment for the $24.2 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:

Question 1: Prepare the journal entries for LCD's purchase of the components on November 1, 2021 and the first installment payment on November 30, 2021.

Question 2: What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2021?