On January 1, 2024, Instaform, Incorporated, issued 10% bonds with a face amount of $48 million, dated January 1. The bonds mature in 2043 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually. Determine the price of the bonds at January 1, 2024. Prepare the journal entry to record their issuance by Instaform. Assume the market rate was 9%. Determine the price of the bonds at January 1, 2024. Assume the market rate was 9%. Prepare the journal entry to record their issuance by Instaform. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.
On January 1, 2024, Instaform, Incorporated, issued 10% bonds with a face amount of $48 million, dated January 1.
- The bonds mature in 2043 (20 years).
- The market yield for bonds of similar risk and maturity is 12%.
- Interest is paid semiannually.
Determine the price of the bonds at January 1, 2024.
Prepare the
Assume the market rate was 9%. Determine the price of the bonds at January 1, 2024.
Assume the market rate was 9%. Prepare the journal entry to record their issuance by Instaform.
Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.
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)
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