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National Orthopedics Companu issued 11% bonds, dated January 1, with a face amount of $700,000 on January 1, 2024. . The bonds mature on December 31, 2027 (4 years). • For bonds of similar risk and maturity the market yield was 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by National on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

National Orthopedics Companu issued 11% bonds, dated January 1, with a face amount of $700,000 on January 1, 2024. . The bonds mature on December 31, 2027 (4 years). • For bonds of similar risk and maturity the market yield was 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by National on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

FINANCIAL ACCOUNTING
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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National Orthopedics Companu issued 11% bonds, dated January 1, with a face amount of $700,000 on January 1, 2024. . The bonds mature on December 31, 2027 (4 years). • For bonds of similar risk and maturity the market yield was 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by National on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Table values are based on: Determine the price of the bonds at January 1, 2024. Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place. Cash Flow Interest Principal n = j= Price of bonds Required 3 Required 4 Amount % Present Value Required 5 Required 1 Required 2 >
Transcribed Image Text:National Orthopedics Companu issued 11% bonds, dated January 1, with a face amount of $700,000 on January 1, 2024. . The bonds mature on December 31, 2027 (4 years). • For bonds of similar risk and maturity the market yield was 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by National on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Table values are based on: Determine the price of the bonds at January 1, 2024. Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place. Cash Flow Interest Principal n = j= Price of bonds Required 3 Required 4 Amount % Present Value Required 5 Required 1 Required 2 >
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