186. On January 1, a company issued 10%, 10-year bonds payable with a par value of $720,000. The bonds pay interest on July 1 and January 1. The bonds were issued for $817,860 cash, which provided the holders an annual yield of 8%. Prepare the journal entry to record the first semiannual interest payment, assuming it uses the straight-line method of amortization.
187. On January 1, a company issues 8%, 5 year, $300,000 bonds that pay interest semiannuallyeach June 30 and December 31. On the issue date, the annual market rate of interest is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:
Present value of an annuity for 10 periods at 3%........
|
8.5302
|
Present value of an annuity for 10 periods at 4%........
|
8.1109
|
Present value of 1 due in 10 periods at 3%................
|
0.7441
|
Present value of 1 due in 10 periods at 4%................
|
0.6756
|
188. On January 1, a company issues8%, 5 year, $300,000 bonds that pay interest semiannually each June 30 and December 31. On the issue date, the annual market rate of interest for the bonds is 10%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:
Present value of an annuity for 10 periods at 4%
|
8.1109
|
Present value of an annuity for 10 periods at 5%
|
7.7217
|
Present value of 1 for 10 periods at 4%
|
0.6756
|
Present value of 1 for 10 periods at 5%
|
0.6139
|
Present value of principle
|
$300,000 * 0.6139 =
|
$184,170
|
Present value of interest
|
$300,000 * 0.04 * 7.7217 =
|
92,660
|
Selling price of the bond
|
|
$276,830
|
189. On March 1, a company issues 6%, 10 year $300,000 par value bonds that pay semiannual interest each June 30 and December 31. The bonds sell at par value plus interest accrued since January 1. Prepare the general journal entry to record the issuance of the bonds on March 1.