On January 1, 2012, Instaform Company issued 10% bonds with a principal amount of 550 million, dated January 1. The bonds mature in 2031 (20 vears). The market vield for bonds of similar risk and maturity is 12%. Interest is paid semiannually. Required: 1. Determine the price of the bonds at Jannary 1. 2012. and prepare the joumal entry to recoed their issuance by Instaform. 2. Assume the market rate was 9%. Determine the price of the bonds at January 1. 2012, and prepare the journal entry to record their issuance by Instaform. 3. Assume Broadoourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record their purchase by Broadoourt.
On January 1, 2012, Instaform Company issued 10% bonds with a principal amount of 550 million, dated January 1. The bonds mature in 2031 (20 vears). The market vield for bonds of similar risk and maturity is 12%. Interest is paid semiannually. Required: 1. Determine the price of the bonds at Jannary 1. 2012. and prepare the joumal entry to recoed their issuance by Instaform. 2. Assume the market rate was 9%. Determine the price of the bonds at January 1. 2012, and prepare the
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