Present value of the bonds at issuance

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Reference no: EM13147562

On December 31, 2010, when the market interest rate is 10%, Kenneday Realty, co. , issues $600,000 of 7.25% 10 year bond payable. The bonds pay interest simiannually.

Requirments

1. Determine the present value of the bonds at issuance.

2. Assume that bonds are issues at the price computed in requirement 1. Prepare an effective-interest method amortizatio table for the firest two simiannual interest installments.

3. Using the amortization table prepared in requiremnet 2, journalize issuance of the bnds and the first two interest payment. "

Reference no: EM13147562

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