McWherter Instruments sold $400 million of 6% bonds, dated January 1, on January 1, 2021. The bonds mature on December 31, 20 20 years). For bonds of similar risk and maturity, the market yield was 8%. Interest is paid semiannually on June 30 and December Blanton Technologies, Inc., purchased $400,000 of the bonds as a long-term investment. (FV of $1. PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on January 1, 2021. 2. Prepare the journal entries to record (a) their issuance by McWherter and (b) Blanton's investment on January 1, 2021. 3. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at the effective rate). 4. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on December 31, 2021 (at the effective rate).

McWherter Instruments sold $400 million of 6% bonds, dated January 1, on January 1, 2021. The bonds mature on December 31, 20 20 years). For bonds of similar risk and maturity, the market yield was 8%. Interest is paid semiannually on June 30 and December Blanton Technologies, Inc., purchased $400,000 of the bonds as a long-term investment. (FV of $1. PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on January 1, 2021. 2. Prepare the journal entries to record (a) their issuance by McWherter and (b) Blanton's investment on January 1, 2021. 3. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at the effective rate). 4. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on December 31, 2021 (at the effective rate).

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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