Present value of the bonds at issuance

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

Questions Cloud

Explain six measurements for the mass of water delivered : You obtain the following six measurements for the mass of water delivered by a special calibrated volumetric pipette

Define gravitational, capillary and hygroscopic water : Define gravitational, capillary and hygroscopic water and explain how they influenced by pore size distribution, texture, & bulk density

What mass of water should the chemist mix : A chemist wants to prepare a solution with a freezing point of 22.0°C and has 100.00 g of glycerol on hand. What mass of water should the chemist mix with the glycerol?

Concept regarding transactions : The company can identify separately the cost of the product and services and has determined that fair value of the products and services is the selling price (VSOE). Under both US GAAP and IFRS, which of the following statements would be correct r..

Present value of the bonds at issuance : Determine the present value of the bonds at issuance. 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.

Calculate the molality of the solution : A water solution containing 2.00 g of an unknown molecular substance dissolved in 10.00 g of water has a freezing point of 4.0°C. a. Calculate the molality of the solution.

Different components of an aquatic food web highlighting : Make a generalized diagram that shows the different components of an aquatic food web highlighting how energy would flow through the system. If a toxic chemical were introduced to " producers " that accumulates in the bodies of all organisms, which t..

Inventory items of a similar nature and use : A company has two inventory items of a similar nature and use. One item is held at the company's headquarters in Spain and one is held in France. Using IFRS:

Amortization of prior service cost : On January 1, 2010, Krupka LLC amended its pension plan which caused an increase of $6,000,000 in its projected benefit obligation. The company has 400 employees who are expected to receive benefits under the company's defined-benefit pension plan..

User Account

All Pages