Fold in the Cheese, Inc. is issuing $850000 of 8% 10-year bonds. These bonds will pay semi-annual interest payments. The market interest rate is currently 6%.Required:Compute what your bonds are worth. Round all calculations to 2 decimals.Record the sale of the bond with a journal entry.Record the journal entry for your first interest payment.

Bonds are a kind of financial instrument issued for raising cash by the entities for a perspective…

Answered: Compute what your bonds are worth.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Fold in the Cheese, Inc. is issuing $850000 of 8% 10-year bonds. These bonds will pay semi-annual interest payments. The market interest rate is currently 6%.

Required:

Compute what your bonds are worth. Round all calculations to 2 decimals.
Record the sale of the bond with a journal entry.
Record the journal entry for your first interest payment.

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