arts Job Description Bir Chapter 14 Ortega Inc, has a defined ber Homework Saved
ID: 2431574 • Letter: A
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arts Job Description Bir Chapter 14 Ortega Inc, has a defined ber Homework Saved He when Patey Pontoons issued 4% bonds on January 1, 2018, with a face amount of S500,000, the market yield for bonds of similar risk and maturity was 5%. The bonds mature December 31, 2021 (4 years"terests paid semiannually on June 30 and December 31. FV of $1, PV of $1, FVA of S1, PVA of S1,FVAD of $t and PVAD of S) (Use appropriate factorís) from the tables provided) Required: 1. Determine the price of the bonds at January 1, 2018 2. Prepare the journal entry to record their issuance by Patey on January 1, 2018 3. Prepare an amortization schedule that determines interest at the effective rate each period 4. Prepare the journal entry to record interest on June 30, 2018 S. What is the amount releted to the bonds that Patey will report in its balance sheet at December 3t, 20187 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2018? (gnore income taxes) 7. Prepare the appropriate journal entries at maturity on December 31. 2021 Complete this question by entering your answers in the tabs below Req 5 and 6 Req1 Req 2 Req 3 Req 4 Req 7 Determine the price of the bonds at January 1, 2018. (Round finat answers to the nearest whole dotlar.) values are based Cash Flow AmountPresent Interest Princpal Price of bonds Req 2 > Next > C Prev4 of 10 26Explanation / Answer
Required 1
10000
(500000*4%*6/12)
71701
(10000*7.17014)
410375
(500000*0.82075)
Required 2
Required 3
14344
(10000+4344)
4344
(500000-495656)
Required 4
Required 5 and 6
Required 7
Time value based on N = 8 I = 2.5% Cash flow amount present value Interest10000
(500000*4%*6/12)
71701
(10000*7.17014)
Principal 500000410375
(500000*0.82075)
Price of bonds 482076Related Questions
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