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 $29,000 par value and an annual contract rate of 8%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.)

Required:

Consider each of the following three separate situations.

Table values are based on Present Value Cash Flow Par (maturity) value Interest (annuity) Price of bonds Table Value Amount

Explanation / Answer

1a) Complete table :

1b) Journal entries :

2a) Complete table :

2b) Journal entries :

3a) Complete table :

3b) Journal entries :

Table values are based on : n 20 years i 3% Cash flow Table value Amount Present value Par (maturity) Value 0.5537 29000 16057.30 Interest (annuity) 14.8775 1160 17257.90 Price of bonds 33315.20

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