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Prepare the journal entry to record the sale of bond on jan

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On January 1, 2004, P.J. Corporation issues a $5,000 bond with a 6% coupon. The bond matures in five years. The bond is issued to yield a 5% return to investors, selling for $5,216.49.

Required:

Question a. Prepare the journal entry to record the sale of the bond on January 1, 2004.

Question b. How will the bond be presented on P.J.'s balance sheet on January 1, 2004?

Question c. Prepare the entry to record the first coupon payment on December 31, 2004.

Question d. What will be the economic value of the bond on December 31, 2004, assuming no change in market interest rates?

Question e. How will the bond be presented on the balance sheet on December 31, 2004?

Question f. What will be the amount of the net bond liability on December 31, 2008, the day before the bond matures?

Question g. Prepare the entry that will be made on January 1, 2009, the maturity date of the bond.

Reference no: EM132589970

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