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Posted by: Homeworkhelp
Price Quoted by Student: $5
Posted On: 2011-03-07 04:04:51
 
Question

Metro, Inc., issues bonds with a par value of $75,000 on their stated issue date.

 

Exercise 14-7 Computing bond interest and price, and recording bond issuance

 

Fundamental Accounting Principles, 7th Ed Larson Wild Chiappetta

ANSWER KEY Exercise 14-7 Metro, Inc., issues bonds with a par value of $75,000 on their stated issue date. The bonds

 

Exercise 14-7 Metro, Inc., issues bonds with a par value of $75,000 on their stated issue date. The bonds mature in five years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%.

1. What is the amount of each semiannual interest payment for these bonds?

2. How many semiannual interest payments will be made on these bonds over their life?

3. Use the interest rates given to determine whether the bonds are issued at par, at a discount, or at a premium.

4. Compute the price of the bonds as of their issue date.

5. Prepare the journal entry to record the bonds’ issuance.


Solutions
ANSWER KEY Exercise 14-7 Metro, Inc., issues bonds
Price $5
Attachment 1: E 14-7 Metro, Inc.doc
Solution Posted By: Homeworkhelp    Posted on: 07-03-2011