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What is the face value of the bonds

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Reference no: EM132487537

On January 1, 2023, Manson Corporation issued $3-million 10-year bonds. The bonds pay semi-annual interest on July 1 and January 1, and Manson has a December 31, year-end. Presented below is a partial amortization table:

Semi Annual Interest Period

                    Interest payment             Interest expense                    Amortization            Bond Amortized Cost

Jan 1, 2023

[1] July 1, 2023         $75,000

[2]                           $10,095                    3,235,177

Jan 1, 2024

[3]                          64,704                         10,296                        3,224,881

July 1, 2024               75,000                        64,498                           10,502                                          3,214,379

Jan 1, 2025                  75,000                      64,288

[4] July 1, 2025               75,000                     64,073                        10,927                                          3,192,740

Jan 1, 2026                     75,000                     63,855                        11,145                                            3,181,595

Required:

Set up a table in MS Excel with all relevant information. Use the table to answer the following questions in MS Excel. Use Excel formulas to support your calculation whenever possible

Question a. Were the bonds issued at a discount or premium? How do you know?

Question b. What is the face value of the bonds?

Question c. What is the contractual rate of interest?

Question d. Calculate the missing amounts for items [1] through [5] in the amortization table

Question e. What was the market interest rate when the bonds were issued?

Question f. Prepare the journal entry to record the issue the bonds on January 1, 2023

Question g. Prepare the journal entry to record the first interest payment on July 1, 2023

Question h. Prepare the journal entry to record the accrual of interest on December 31, 2023

Question i. What amounts would be reported as current and as non-current liabilities on Manson's December 31, 2023 balance sheet?

Reference no: EM132487537

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