8. 2.00 points Exercise 14-9 Issuance of bonds; effective interest: amortization

Question

8. 2.00 points Exercise 14-9 Issuance of bonds; effective interest: amortization schedule:; financial statement et when Patey Portors issued 6% bonds on January 1, 2016, with a face amount of $600,000, the market yield for bonds of similar rak and maturity was 7% The bonds mature December 31, 2019 (4 years Interest is paid semiannually on June 30 and December 31. (FV of $1. PV of $1, FVA of $1, PVA of $1 FVAD of $1 and PVAD of $1) (Use appropriate factorts) from the tables provided.) Determine the price of the bonds at January 1, 2016. 3 5% 18,000$ $ 600,000 455,640 S579,372 Price of bonds 2.Prepare the journal entry to record their issuance by Patey on January 1, 2016. (If no journal entry is required for a transaction, select "No journal entry required in the first account field. View tr Journal entry worksheet Record the issuance of the bonds on January 1, 2016 MacBook Air esc 3

Explanation / Answer

5) dec 31,2016 book value 584,008 6) interest expense for 2016 40636 7) Date General Journal Debit Credit 12/31/2019 interest expense 20,906 discount on bonds payable 2,906 cash 18,000 12/31/2019 Bonds payable 600,000 cash 600,000

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