am. 101. On April 1, 2000, a $150,000, ten-year, 12% bond was sold to yield 14% plusaccrued interest. The bond was dated January 1, 2000, and interest is paid eachJanuary 1 and July 1. Present value data follow:PV of10 periods$120 periodsPV of an Annuity10 periods20 periods11.4699216%0.5583957%0.50834912%0.32197314 %0.2697440.3118050.2584190.1486440.1036677.3600877.0235825.6502235.21611610.5940147.4694446.623131Required:1.2.Compute the amount of cash received from the sale of the bond.Prepare the journal entry to record the sale."

Issue price of the bonds = Present value of principal + Present value of interest paymentswhere,…

On April 1, 2000, a $150, 000, ten-year, 12% bond was sold to yield 14 plus accrued interest. The bond was dated January 1, 2000, and interest is paid each January i and July 1. Present value data follow: PV of $1 10 periods 6% 0.558395 78 0.508349 12% 0.321973 14% 0.269744 20 periods 0.311805 0.258419 0.148644 0.103667 PV of an Annuity 10 periods 7.360087 7.023582 5.650223 5.216116 20 periods 11.469921 10.594014 7.469444 6.623131 Required: 1. Compute the amount of cash received from the sale of the bond. 2. Prepare the journal entry to record the sale.

On April 1, 2000, a $150, 000, ten-year, 12% bond was sold to yield 14 plus accrued interest. The bond was dated January 1, 2000, and interest is paid each January i and July 1. Present value data follow: PV of $1 10 periods 6% 0.558395 78 0.508349 12% 0.321973 14% 0.269744 20 periods 0.311805 0.258419 0.148644 0.103667 PV of an Annuity 10 periods 7.360087 7.023582 5.650223 5.216116 20 periods 11.469921 10.594014 7.469444 6.623131 Required: 1. Compute the amount of cash received from the sale of the bond. 2. Prepare the journal entry to record the sale.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On May 1, 2020, a $300,000, ten-year, 14% bond was sold to yield 12% plus accrued interest. The bond was dated January 1, 2020, and interest is paid each January 1 and July 1. Present value data follow: PV of $1 PV of an Annuity of $1 10 periods 20 periods 10 periods 20 periods 6% 0.558395 0.311805 7.360087 11.469921 7% 0.508349 0.258419 7.023582 10.594014 12% 0.321973 0.103667 5.650223 7.469444 14% 0.321973 0.072762 5.216116 6.623131 Required: a. Compute the amount of cash received from the sale of the bond. b. Prepare the journal entry to record the sale. c. Why is the amount of cash received from issuing the bond not equal to the face amount of the bond?
On April 1, 2000, a $150,000, ten-year, 12% bond was sold to yield 14% plus accrued interest. The bond was dated January 1, 2000, and interest is paid each January 1 and July 1. Present value data follow: PV of 10 periods 6% 0.558395 7% 0.508349 12% 0.321973 14% 0.269744 $1 20 periods 0.311805 0.258419 0.148644 0.103667 4400 PV of an Annuity 10 periods 7.360087 7.023582 5.650223 5.216116 20 periods 11.469921 10.594014 7.469444 6.623131 Required: 1. Compute the amount of cash received from the sale of the bond. 2. Prepare the journal entry to record the sale.
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