Quatro issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10 %, and there was bonds Issuance costs of $29,850 1. What is the price of these bonds at issuance? 2. Prepare the journal entries to record how much total bond interest expense will be recognized over the life of these bonds and the Bond issuance costs 3 Prepare an amortization table for these bonds using the effective interest method.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Quatro issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual
contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds
mature in three years. The annual market rate at the date of issuance is 10%, and there was
bonds Issuance costs of $29, 850 1. What is the price of these bonds at issuance? 2. Prepare the
journal entries to record how much total bond interest expense will be recognized over the life of
these bonds and the Bond issuance costs 3 Prepare an amortization table for these bonds using
the effective interest method.
Transcribed Image Text:Quatro issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and there was bonds Issuance costs of $29, 850 1. What is the price of these bonds at issuance? 2. Prepare the journal entries to record how much total bond interest expense will be recognized over the life of these bonds and the Bond issuance costs 3 Prepare an amortization table for these bonds using the effective interest method.
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