Hartford Research issues bonds dated January 1, 2017, that pay interest semiannu

Question

Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds have a $26,000 par value and an annual contract rate of appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.) 12%, and they mature in 10 years. (Table 81, Table B2. Table E.3. and lable R 4) (Use Required: Consider each of the following three separate situations. warded I. The market rate at the date of issuance is 10%. (a) Complete the below table to determine the bonds' issue price on January 1, 2017 (b) Prepare the journal entry to record their issuance. The market rate at the date of issuance is 12%. (a) Complete the below table to determine the bonds' issue price on January 1, 2017 (b) Prepare the journal entry to record their issuance. 3.The market rate at the date of issuance is 14%. (a) Complete the below table to determine the bonds' issue price (b) Prepare the journal entry to record their issuance. on January 1, 2017 Complete this question by entering your answers in the tabs below Required 1A Required 1B Required 2A | Required 2B Required 3A Required 38 Complete the below table to determine the bonds' issue price on January 1, 2017, if the market rate at the date of issuance is 12%. are 60% ? Par imaturdy value 0 3769 3 s 26,000S 9 799

Explanation / Answer

1. Bond Issue price on January 1 is $29,240 when market rate is 10%

b. Journal entry

2. Bond Issue price on January 1 is $26,000 when market rate is 12%

b.

3. Bond Issue price on January 1 is $23,246 when market rate is 14%

b.

Table value are based on: n=20 i= 5% Cash Flow Table Value Amount Present Value Par (maturity value) 0.37689 26,000 9,799 Interest (annuity) 12.46221 1,560 19,441 29,240 PV factor 1 0.952 2 0.907 3 0.864 4 0.823 5 0.784 6 0.746 7 0.711 8 0.677 9 0.645 10 0.614 11 0.585 12 0.557 13 0.530 14 0.505 15 0.481 16 0.458 17 0.436 18 0.416 19 0.396 20 0.377 12.462

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