Serotta Corporation is planning to issue bonds with a face value of $500,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. 3. What bonds payable amount will Serotta report on this year's December 31 balance sheet? Note: Round your final answer to nearest whole dollar amount. Bonds payable

Serotta Corporation is planning to issue bonds with a face value of $500,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. 3. What bonds payable amount will Serotta report on this year's December 31 balance sheet? Note: Round your final answer to nearest whole dollar amount. Bonds payable

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Step 1: Issue Price

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Step 2: Computation of proceed received from issuance of bonds on January 1:

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Step 3: Amortization table to determine the carrying value of the bonds at December 31:

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