On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face amount of $50 million. The bonds mature on January 31, 2028 (four years). • The market yield for bonds of similar risk and maturity was 8%. • Interest is paid semiannually on July 31 and January 31. • Barnwell Industries acquired $50,000 of the bonds as a long-term investment. • The fiscal years of both firms end December 31. Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. กาง
On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face amount of $50 million. The bonds mature on January 31, 2028 (four years). • The market yield for bonds of similar risk and maturity was 8%. • Interest is paid semiannually on July 31 and January 31. • Barnwell Industries acquired $50,000 of the bonds as a long-term investment. • The fiscal years of both firms end December 31. Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. กาง
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Define bonds
VIEWStep 2: Computation of the price of the bonds
VIEWStep 3: Prepare amortization schedule for both the bond issuer and the investor's perspective
VIEWStep 4: Prepare the journal entries at the date of bonds issuance (issuer and investor)
VIEWStep 5: Prepare the journal entries for events related to the bonds (issuer and investor)
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