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Prepare the journal entries to record the issuance

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Reference no: EM132494470

The Bradford Company issued 12% bonds, dated January 1, with a face amount of $85 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (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. Determine the price of the bonds at January 1, 2021.

Question 2. Prepare the journal entries to record their issuance by The Bradford Company on January 1, 2021, interest on June 30, 2021 and interest on December 31, 2021 (at the effective rate)

  1. Record the bond issuance by the Bradford Company.
  2. Record the interest on June 30, 2021 (at the effective rate).
  3. Record the interest on December 31, 2021 (at the effective rate).

Reference no: EM132494470

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