Paul B.
asked • 14dOn January 1, 2021, Instaform, Inc
On January 1, 2021, Instaform, Inc., issued 12% bonds with a face amount of $60 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity is 14%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1-a. Determine the price of the bonds at January 1, 2021.
1-b. Prepare the journal entry to record their issuance by Instaform.
2-a. Assume the market rate was 11%. Determine the price of the bonds at January 1, 2021.
2-b. Assume the market rate was 11%. Prepare the journal entry to record their issuance by Instaform.
3. 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.
No expert answers yet
Answers can only be accepted by verified, expert tutors.
Still looking for help? Get the right answer, fast.
Get a free answer to a quick problem.
Most questions answered within 4 hours.
OR
Choose an expert and meet online. No packages or subscriptions, pay only for the time you need.
