On january 1 2010 parabolic company issued 8 bonds with a, Ask an Expert

Accounting

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On January 1, 2010, Parabolic Company issued 8% bonds with a face amount of $72.9 million, dated January 1. The bonds mature in 2025 (15 years). The market yield for bonds of similar risk and maturity is 10%. Interest is paid semiannually.

Required:

1. Assume the market rate was 7%. Determine the price of the bonds at January 1, 2010, and prepare the journal entry to record their issuance by Parabolic.

2. Using the original information provided, determine the price of the bonds at January 1, 2010, and prepare the journal entry to record their issuance by Parabolic.

3. Assume Linear Networks, Inc. purchased the entire issue in a private placement of the bonds. Using the data in Requirement 1, prepare the journal entry to record their purchase by Linear Networks

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9277415

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