Instructions On July 1, 20Y1, Danzer Industries Inc. issued $37,400,C $32,739,152. Interest on the bonds is payable semiannua Required: amount o 1. Journalize the entry to record the amount of cash 2. Journalize the entries to record the following a. The first semiannual interest payment on Dece b. The interest payment on June 30, 20Y2, and th 3. Determine the total interest expense for 201 4. Will the bond proceeds always be less than the fac 5. Compute the price of $32,739, 152 received for the
Instructions On July 1, 20Y1, Danzer Industries Inc. issued $37,400,C $32,739,152. Interest on the bonds is payable semiannua Required: amount o 1. Journalize the entry to record the amount of cash 2. Journalize the entries to record the following a. The first semiannual interest payment on Dece b. The interest payment on June 30, 20Y2, and th 3. Determine the total interest expense for 201 4. Will the bond proceeds always be less than the fac 5. Compute the price of $32,739, 152 received for the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Instructions
On July 1, 20Y1, Danzer Industries Inc. issued $37,400,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of
$32,739,152. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year
Required:
1. Journalize the entry to record the
2. Journalize the entries to record the following
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line metho
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method.
3. Determine the total interest expense for 201
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?
5. Compute the price of $32,739,152 received for the bonds by using the present value tables
DITE
Hount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
ount
neeenin
ornit
PORNT
SPECTR
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