On January 1, 2024, Mania Enterprises issued 12% bonds dated January 1, 2024, with a face amount of $21.0 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on January 1, 2024, 2. Prepare the journal entry to record the bond issuance by Mania on January 1, 2024. 3. Prepare the journal entry to record interest on June 30, 2024, using the effective interest method. 4. Prepare the journal entry to record interest on December 31, 2024, using the effective interest method.
On January 1, 2024, Mania Enterprises issued 12% bonds dated January 1, 2024, with a face amount of $21.0 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on January 1, 2024, 2. Prepare the journal entry to record the bond issuance by Mania on January 1, 2024. 3. Prepare the journal entry to record interest on June 30, 2024, using the effective interest method. 4. Prepare the journal entry to record interest on December 31, 2024, using the effective interest method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: accounting
Transcribed Image Text:On January 1, 2024, Mania Enterprises issued 12% bonds dated January 1, 2024, with a face amount of $21.0 million. The bonds mature
in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and
December 31.
Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)
Required:
1. Determine the price of the bonds on January 1, 2024.
2. Prepare the journal entry to record the bond issuance by Mania on January 1, 2024.
3. Prepare the journal entry to record interest on June 30, 2024, using the effective interest method.
4. Prepare the journal entry to record interest on December 31, 2024, using the effective interest method.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3 Required 4
Determine the price of the bonds on January 1, 2024.
Note: Enter your answers in whole dollars not in millions (i.e., 1,000,000 not 1). Round your intermediate calculations and
final answer to the nearest whole dollar.
Bond value
Required 2 >
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