On january 1 2016 barden universal issued 12 bonds dated, Ask an Expert

Accounting

On January 1, 2016, Barden Universal issued 12% bonds dated January 1, 2016, with a face amount of $200 million. The bonds mature in 2025 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.

Required:

1. Determine the price of the bonds at January 1, 2016.

2. Prepare the journal entry to record the bond issuance by Barden on January 1, 2016.

3. Prepare the journal entry to record interest on June 30, 2016, using the effect interest method.

4. Prepare the journal entry to record interest on December 31, 2016, using the effective interest method.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92021267

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