On January 1, 2025, Blossom Co. issued ten-year bonds with a face value of $6,750,000 and a stated interest rate of 10 %, payable semiannually on June 30 and December 31. The bonds were sold to yield 12 %. Table values are: Present value of 1 for 10 periods at 10% 0.38554 Present value of 1 for 10 periods at 12% 0.32197 Present value of 1 for 20 periods at 5 % 0.37689 Present value of 1 for 20 periods at 6 % 0.31180 Present value of annuity for 10 periods at 10 % 6.14457 Present value of annuity for 10 periods at 12 % 5.65022 Present value of annuity for 20 periods at 5% 12.46221 Present value of annuity for 20 periods at 6% 11.46992 1. Calculate the issue price of the bonds. 2. Prepare he amortization table for 2025, assuming that amortization is recorded on interest payment dates using the effective - interest method.

On January 1, 2025, Blossom Co. issued ten-year bonds with a face value of $6,750,000 and a stated interest rate of 10 %, payable semiannually on June 30 and December 31. The bonds were sold to yield 12 %. Table values are: Present value of 1 for 10 periods at 10% 0.38554 Present value of 1 for 10 periods at 12% 0.32197 Present value of 1 for 20 periods at 5 % 0.37689 Present value of 1 for 20 periods at 6 % 0.31180 Present value of annuity for 10 periods at 10 % 6.14457 Present value of annuity for 10 periods at 12 % 5.65022 Present value of annuity for 20 periods at 5% 12.46221 Present value of annuity for 20 periods at 6% 11.46992 1. Calculate the issue price of the bonds. 2. Prepare he amortization table for 2025, assuming that amortization is recorded on interest payment dates using the effective - interest method.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...

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