On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest paid semiannually on June 30 and December 31. The market yield for bond of similar risk and maturity is 7%. The fiscal year for the firm ends on December 31. A. Determine the price of the bonds issued on January 1. B. Prepare the amortization schedule for the bonds using the effective interest rate method. C. Prepare the journal entries to record: • Issuing bonds on January 1 • Paying interest on June 30, 2021 • Paying interest on Dec 31, 2021 • Repayment of the bonds on December 31, 2025.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest is
paid semiannually on June 30 and December 31. The market yield for bond of similar risk and
maturity is 7%. The fiscal year for the firm ends on December 31.
A. Determine the price of the bonds issued on January 1.
B. Prepare the amortization schedule for the bonds using the effective interest rate method.
C. Prepare the journal entries to record:
• Issuing bonds on January 1
• Paying interest on June 30, 2021
• Paying interest on Dec 31, 2021
• Repayment of the bonds on December 31, 2025.
Transcribed Image Text:On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest is paid semiannually on June 30 and December 31. The market yield for bond of similar risk and maturity is 7%. The fiscal year for the firm ends on December 31. A. Determine the price of the bonds issued on January 1. B. Prepare the amortization schedule for the bonds using the effective interest rate method. C. Prepare the journal entries to record: • Issuing bonds on January 1 • Paying interest on June 30, 2021 • Paying interest on Dec 31, 2021 • Repayment of the bonds on December 31, 2025.
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