!Required information[The following information applies to the questions displayed below.]On January 1 of this year, Cunningham Corporation issued bonds with a face value of $200,000 and a coupon rate of 6percent. The bonds mature in 10 years and pay interest annually every December 31. When the bonds were sold, theannual market rate of interest was 8 percent. The company uses the effective-interest amortization method. By December31 of this year, the annual market rate of interest had increased to 10 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1)Note: Use appropriate factor(s) from the tables provided.Required:1. What is the issuance price of the bonds on January 1?Note: Round your intermediate calculations and final answer to nearest whole dollar amount.

The issuance price of Cunningham Corporation's bonds, calculated using the present value formulas…

Answered: ! Required information [The following…

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
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Required information [The following information applies to the questions displayed below.] Serotta Corporation is planning to issue bonds with a face value of $460,000 and a coupon rate of 8 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 4 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) 2. Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.) View transaction list Journal entry worksheet 1 2 3 4 > Record the interest payment on…
On June 1, 2006, Janson Bottle Company sold $400,000 in long-term bonds for $351,040. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a.) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Make sure all columns and rows are properly labeled. (Round to the nearest dollar.) (b) Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on December 31, 2008. (Round to the nearest dollar.)

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